Casual restaurants resort to coupons as meal tickets

— -- Here's the surest sign that casual dining is in the dregs: Coupons are flying.

For consumers, it might seem like edible gold. Five dollars off here. Two-for-ones there.

"This is one of the worst scenarios that I've seen in the 14 years I've covered the industry," says Lynn Collier, analyst at KeyBanc Capital Markets. "Consumers are the winners — we'll only see more of this."

This is not supposed to be the time of year for coupons in the $70 billion casual-dining industry. Business should be picking up as the holidays get closer. Not this year. Blame the housing crisis, higher gasoline prices and the uncertain economy.

"It's like a perfect storm hitting casual dining right now," says Clay Dover, chief concept officer of Bennigan's parent Metromedia Restaurant Group.

Hectic lives are not helping. "When your kid has soccer practice on Tuesday, a flute lesson on Thursday and a soccer game on Saturday, who has time to eat out?" restaurant consultant Linda Lipsky says.

That's why Bennigan's will test a prototype Bennigan's Quick Grille in Dallas in 2008, with food ordered at a counter and no waiters. "We've got to find ways to adapt to consumer lifestyles," Dover says.

In tough markets — including Michigan and Washington, D.C. — Bennigan's has circulated coupons worth $5 off meals of $15 or more.

Unlike a 50-cent coupon for detergent, a $5 restaurant coupon can be extremely alluring, Lipsky says. Once lured in, she says, diners can be enticed to buy pricey desserts and drinks. "That's how restaurants make a profit." But it can be a one-night stand. "Some diners don't come back until they get their next coupon," consultant Ron Paul says.