Groupon Blamed For Demise Of DFW Small Businesses
NORTH TEXAS (CBSDFW.COM) - Holiday shopping is expected to peak this week with Black Friday, but many North Texas businesses may not benefit.
Some small employers say they are being driven out of business because of Groupon — the popular email, deal-of-the-day discount company.
Whether it’s a haircut, massage or manicure, cost-conscious customers can find discounts galore on Groupon.
“For me, its a case of trying somebody new,” explained local Groupon user Georgette Doukas.
Groupon is a purchased coupon deal that becomes available if a select number of people sign up to buy.
But salon owners like Debra Pak say they lose money and rarely see customers return for full-price service.
The Shear Heaven Salon owner said, “Most of the customers are looking for the next best deal.”
Pak took a loss by offering half-off expensive hair treatments, for 130 people, through Groupon. She had hoped the venture would attract new clients, but despite good reviews only 10 returned for future services.
“It’s killing small businesses like me,” Pak said.
Some local businesses, like Grand Spa in north Dallas, have turned their back on Groupon and instead are offering customer appreciation weeks and other promotions. The move accomplishes two things – offers ‘rewards’ for regular clientele and brings in new clients with the discount price lure.
“Those customers [Groupon] are not loyal customers, they follow the discount and we want customers who are going to come back week-after-week,” explained Grand Spa co-owner Stacey Maness.
But many business owners admit, with the growing popularity of Groupon, it also hurts them not to participate.
“If I stop and other salons keep doing then it I’m going to be kind of lost in the shuffle,” said Pak.
The owner of a former sub shop in north Dallas blames the demands of Groupon for the store’s demise, a few months ago.
Pak plans to take her concerns to others in her industry through a blog or on Facebook. She wants to try and create standards before its too late.
“We are losing money and I know I’m not the only salon that loses money by doing this [Groupon],” proclaimed Pak.
CBS 11 News left phone and email messages for Groupon, but the messages were not returned.