The Atlantic just published an investigative piece looking at the economics behind bottomless drinks and whether they’re good for business. We all know thirsty, zombie-like brunchgoers love to down free alcoholic shit (because that’s literally what these drinks are, complete shit), but it’s hard to believe that businesses actually make money off of doing this.
Derek Thompson, who hosts The Atlantic’s video series Economics in Plain English, explains that peer pressure from other restaurants drives most restaurateurs to provide bottomless drinks with brunch. And the bottomless booze makes emotional and psychological sense because people love and are attracted to free stuff, like free booze refills. The economic rational is that booze refills aren’t about money at all. Rather, they’re a way to market and advertise your business. Thompson explains:
Bottomless drinks are what economists call a loss leader, which is something a company sells at a loss expecting to get you in the door and sell you on more products later on. “In boozy brunch, mimosas are kind of like the hook that make you a profitable customer later on when you eat at the restaurant again and again and recommend it to your friends.”
Thompson sums up his research by concluding that bottomless drinks are good for business only if they’re good enough to make you come back to the restaurant. But let’s be serious here—what restaurant actually serves quality bottomless drinks? None of them do. Jordana Rothman astutely states this fact in her Complete Guide to Hating Brunch:
[via The Atlantic]