You have to wonder how saturated this market can get before it's just not viable anymore.
I even see a deal on Groupon Now which is $5 for a $9 sandwich. http://www.groupon.com/now/deals/5-for-9-at-nyc-bagel-deli-2...
That said, I fully agree it doesn't necessarily mean anything that Groupon can do it, too. There's plenty of room for competition.
To users, $20 worth of food doesn't tell them anything about what they're actually going to buy when they arrive at the venue, whereas $1 for a $2 cup of coffee specifies exactly what they'll get. You might also only spend $18.50 of your $20 credit and can't find something worth ~$1.50 to buy, which can leave a bad aftertaste for some people.
Also, this allows merchants to prepare much more effectively by overstocking on the items being featured. Or they could discount an already overstocked item just to get rid of it.
All in all, people visit restaurants for specific (signature) dishes, not for the restaurants themselves, so it all fits together.
I think Groupon is too generic; you could easily focus on verticals like food, hit the big pain spots for retailers and deliver a better fit than Groupon.
The reason Groupon won't counter is that takes them too far off their generic script. Plus the food focus means all the sales contacts are foodies, too.
A great idea, and deeper discounts too! $10 for $20 content is not nearly as appealing as "free donut today" (upsell on milk or 2nd donut).
On one hand, you can go wide (Groupon) or deep (Munch), but eventually it becomes saturated and commoditized.
How long before someone creates a self-service way to do this?
I won't hate on them for the press, I'm happy for them, but it feels more like a feature than a product.