Management Research-Survival of Restaurant Industry in Recession - Free Essay Example

Sample details Pages: 16 Words: 4743 Downloads: 1 Date added: 2017/09/11 Category Advertising Essay Did you like this example? Will Restaurant industry survive with current Economic Recession In United Kingdom? † â€Å"As Budget hits Recession †¦Bucks are in congestion†¦Belly’s locked its Dine-out fun! † INTRODUCTION This economic downfall is a shock for the people who are up in the profit ladder, challenge for the owners in the middle and caution for the starters about to climb. This economic downfall though had swallowed profits and credits of various fields. It has feed numerous profit counts for the media, as it is the seasonal hit topic for them to deal with, to give news and earn quid out of it. The Restaurants so called the ever green Industry is now facing the spring, losing its greens in fall. The fast food restaurants under the shade faced no pain while the fine dining faces quake in their quid’s. The restaurants to survive are not an impossible deal but a challenging issue which could healthily survive following the balancing factors and basic techniques. Don’t waste time! Our writers will create an original "Management Research-Survival of Restaurant Industry in Recession" essay for you Create order IS YOUR MENU AFFORDABLE OR OFFENDABLE? To hit your target, the restaurant Owner must ever plan the cost line to be fair and which is normally 60 to 70 percent of the revenue in total which includes the wages, food and beverage cost, expenses, insurance, electricity, utilities and the monthly bills. To take a keen look at controlling the food costs, a key technique can be used with other utilizing factors known as Menu Engineering. It is nothing but planning, choosing, listing, pricing and appraising the menu sheet. Michael L, Donald I ,1982) The regular formula of ingredients cost price being the quotient when divided by the menu price is followed is continuity basis. But menu price lesser than the food cost is the menu planning methodology which contributes a margin to the food cost. Listing the menu based on its popularity and pricing it parallel to its demand will equally help for uplift. .( Michael L, Donald I,1982) To evaluate the items sold with periodic maintenance of account will work more for profit. Thus to organize the menu affordable both y customers and the owners profit properly is the hit list menu. MERCHANDISE FROM INTERIOR The highly effective marketing is nothing but impressing the guests in to your restaurant. The hospitality and timely attention with delightful recipes would not only enhance them but also let to welcome them again with other customers to whom the restaurant was being recommended. This real customer attraction tactics will deeply assist for the food concern’s profit. To retain the customer is less consuming than to expect new customers which would be obvious, if the regular are retained. The conservative ideas of the presentation, recipe and in decoration will win the profit race. (John F, 1997) Invite, Impress the new guests, introduce your elements and concept of the food menu u provide. Get noted with the impressed consumers and welcome them more warm , when they retain and please serve them with privilege and initiate for your delicacies for their choice. For a long term commitment, a greet note in mail for their special days would enhance them and retain them with more customers as well. Conduct, food festivals, discount combos, delights by upgrading the trend and season equivalent to the audience majority of food choice . Before the food service begins, just a piece of note about your restaurant built and thought history, facts about the food served, which would explain the calories that is contained and how healthy the food is, which will obviously please the customers. (Michael F Jayne G , 2002) A crayon and paper for the accompanying kid which will make them adore awaiting for their dinner rather than getting bored. RECESSION IMPACT ON RESTAURANTS In 1000 people survey 27 percent confirmed that their first wind up in spend list is the restaurants and dine outs. The French restaurants in Europe has mainly dropped fall up to 50%and Traditional restaurants turnover has fallen to half of usual. Recession report says about 64% of British are now less likely to drink and eat out. 46% have cut back on the amount they tip during dine out. The other massive pull back now is horizon of Swine Flu. This wide spread influenza has influenced people to get locked at home . The pubs and night restaurants have become insolvent and hits closures by next year. The food chains serving at or below 5 quid’s and margin based restaurants could cope up with the economic down fall; the main fall target hooked the high profit class restaurants. Thus the economic recession hits great offers for the dine outs, like fine dinning for free, have 3 course menu and pay just for starter, etc. leading celebrity chefs are forced to close few of their resta urant branches due to credit down economy. While the restaurants tends to lose staffs, loss in run fast foods like MC DONALD, KFC, DOMINO’S PIZZA have seen more percent profit and recruits more jobs for their branches. Thus the restaurants choices are arbitrary and majority people shift to fast food huts from 3 course high delights. ( Fred,1994) This credit crunch has made the labor and employment issues like wages, scheduling, health costs, low tips etc to deal tough. Though among 150 London restaurants for Business Link’s monthly Restaurant Barometer, 40 per cent of the capital’s businesses reported an increase in like custom and profits from April to June this year. Some all time elements and recession hazards leads the restaurant market down. Economic influences are the favorable long-term trends towards greater eating out activity will drive renewed market growth. (Sally, Lyndon, 1994) There will be a recessionary legacy related to customer value expectations, but issues around customer experience, convenience, healthier eating, provenance and sustainability will inevitably work their way back up the agendas of both consumers and management. RECESSION FACED IS WORSE THAN NINETIES Now London is passing the eighteen month credit crunch phase which is a lot deeper and longer than it was before and in the other areas. According to the research done by the central economy and business. it is found that the credit crunch has shrunk the capital more as London is the city where all hooks depend and so the economic fall is worse than the nineties. This credit quake forced lots of job lost individuals, which the research says would even increase further, and the financial downfall has drastically affected restaurants and pubs leaving empty in lunch time and some even closed in loss. Thus the research, report, survey all submits and admits that the economic fall will rise up slow but will recover in to gear while the capital welcomes Olympic in 2012 positively. FEARSOME DINERS CAUSED BY RECESSION The economic situation has made most of the customers planed for less spending for the future safety. By the market analysts report, it is found that the two third of the public cut out dinning and half are personally affected. A substantial 3 in 10 adults have trimmed out their dine outs mainly because of the fear of recession and not for that they have to do so. The consumer research repots that more than the really economic suffer the recession phobia has spread overall which stimulated brakes in dine out. The credit crunch has developed adapting, spending behavior if or not it is required. The consumers percentage of dine out has decreased in one side but also we could find pub drinks and dine lights still popular in the dinning sector with 7. 6 billon sales in 2008. It is also analyzed that the dine out circle in UK was valued up to 31. 1 billion in 2008 with an average of 10 pound per week by a consumer. The half of the adults still remains same in their pub drinks and dines outs in regular basis. Thus it reveals to rediscover the offer of the pubs. Though the economic flash out didn’t make the pubs houseful and it stays as the final option for the adults, they find value of it even if rare. Safe spending and knock for bucks is the challenging requirement for the consumers by the industry and government. INDIAN MEALS BEATS UP CREDIT CRUNCH Indian restaurants Industry was too shot by the recession, but still people get enhanced by the spicy curry and cheap ready meals which vanish soon in supermarkets. The people’s visit count to Indian restaurants may have reduced but the switch over of ready meal supply by the entrepreneurs have been soar and also struggled to meet the demand. The ready meals from stores and take away are far cheap and convenient than price dragging restaurant dishes. The loss in restaurants is found directly proportional to the gain in ready meal suppliers, caterers. In this current down in market, Indian ready meal owners do have found gain and demand in their new launched product. The Restaurant Managers say that they offer catering service and food meal supply to church weddings and celebration party which do give them profit and The ready meal companies submit positive growth and gain in the ready meal market which a prominent achievement in meeting the demand of supply. Icon group,2006 –2011) Two years old â€Å"The Tiffin Food â€Å"company in Leicester which was awarded as the best Asian restaurant by the Rutland and Leicestershire Restaurant Awards, utilize recipes and ingredients in a Tiffin restaurant. FOOD COST QUOTATION The food costing plays major role in the restaurant industry. The food cost quotation is explained as the detailed calculation prepared with each and every ingredients cost price, labour charges and other basic strategy to fix the final price of the product with a profit margin. The owners/managers tend to manage their profit line proportionate to the food cost planning theoretically and practically. They take guts to price up for their signature dishes which are quality assured. But now in the period of recession it is must to check their price line for the customer support. As pricing the item with a profit analysing cost of its ingredients, it is a tricky issue and main factor of this industry. The main factor which enables the chain restaurants jump up in profits and have sustainable success is portion control of the menu. They are specific in execution of food quantity and quality of each recipe. The proportioned food items and equal amount food service will benefit the restaurant from food wastage and labour charges. The numbering and appealing quantity of food will include raise in profit percentage. The seasonal menu will too help in costing the food and profit count. The menu to consumers taste, trend and seasonal ingredients incorporating in several dishes with unique twist which emboss the meal from other restaurants hooks the consumers. To use local farm products and fresh vegetables and creating less expensive menu will beat the competitive restaurants. The best price structure should be with the certain factors such as ingredients cost, value of the meal, recipe costs and other variable cost will succeed. (Bernard , 2008). Food Hygiene The best food hygiene in the restaurant is the predominant factor of consumer’s satisfaction and long validity of success. The reuse of left out meal and reheated meal may display gain for the day but would sink the customer count. To maintain a proper hygiene scrubbing, cleaning, wash up, safe hands, regular table wipe up must be set mandatory and the employees must be strictly trained to follow the hygiene factors. To launch a basic simple savoury shop or brand restaurant food hygiene certificate must be issued and it has to be valid with good conduct. The basic practical sense to fill the random hygiene requirements such as maintaining a clean domestic kitchen, regular cleaning of lavatory, napkin and towel change, floor mop etc creates more comfort to the customers. The temperature control in freezer and food storage plays major role as the carelessness in storage will spoil the entire meal and storage. These hygiene factors followed in routine and supervised by the owner will help to maintain the sustainability of success. The recession makes many aspects of the restaurant industry flexible and insist menu and cost modulation but the main only success factor which has to have no compromise is food hygiene. This increase the resistance of consumers and profit stability of the restaurant. RESTAURANT ROOT FACTORS For stabilising in the industry each must be certain with the tactics of the industry and mainly the restaurant marketing which would only turn the restaurant in to business. The successful components to win the marketing strategy is such that of following specific basic ideals in a planned manner. Branding, Positioning, Due diligence, Training, Menu mixture. Branding is nothing but a promise assured to the consumers and properly executed by the concern. It is not a recognition of the logo by the customers, but brand is to fill the gap between the advertised promise and the product or menu given as per guaranteed. This will root us in industry for a long lasting period. (Bernard , 2008) Positioning is another major component which deserve for the betterment of the restaurant. It is to analyse the customer standard and expectations and provide them the choice of their budget. The USP so called unique selling proportion is to be followed in this field to last and to win the competitive market. To provide the best to both cheap and high choice attaining full satisfaction to the customers will keep your restaurant standard. Due diligence is to know all the required factors such as competitive restaurant, financial output and input, sales under progress, marketing backup, internal consumers and customers need and so on this at a regular basis will help improve the restaurant in a early period. Training is interconnected with other main sources such as operation, management and resources. Beyond the employee orientation and customer service. The training process should be under progress such that it meets and beats the competitive features and current need by the customers, the training must deeply involve with patience, listening, face charm, attentiveness, appearance, hygiene and hospitality. (john R, 2007) To impress the customers for the first time, always it is high costing for the launchers for building their stability in the industry, The trial customers will mainly concentrate on the quality and cost of the food and the service they provide for their leisure eating. Then the other next issue is to increase the frequency of the customers. To increase the income and frequency of the existing customers it is must to maintain loyalty and give privilege and standard quality meal each time and innovative ideas of change in interior, food festive, offer meals will help for that. The exemption you provide in your bill positively will enthusiast the customers more like, free meal for the driver if they set party at the restaurant. Meal vouchers and other innovative ideas will help improve the income. To allocate the percentage of income in advertising and marketing will play main role in the industry to sustain longer. To increase attraction in sales and marketing of the restaurant keys such as creating and designing a website with attractive factors, distribution of brochures and literatures with price discount and seasonal menu, to build and gain a good reputation among the public, unique selling proposition USP of the restaurant etc will make the restaurant more profitable and success oriented. The main concentration in attracting the customers is mostly held on every restaurant but the more observation and concentration inside the restaurants will be the root to success. Those are the basic factors such as recruiting the skilled staffs, choosing the innovative and well talented chef , appointing the right candidate with leadership qualities and situation handling techniques as manager, Accounting the profit and balance sheet perfectly, to maintain the comfortable, hygienic atmosphere for the customers and delivering the tasty and quality food. Thus the typical restaurants can set up to 6% for the marketing and time of opening and closing the restaurants with consumer’s convenience in mind will help for better success. The more working hours for weekends, less likely on the bland days with take away options will also balance labour cost and increase the income of the restaurant. (Bernard , 2008). FINANCIAL HAZARDS The financial input and output maintained balancing other betterment criteria will definitely improve the restaurant. The main financial hazards of the restaurant which drag back the restaurant from growth financially are as follows. Mismanagement, Bland supervision, Negligence in hygiene, Non implementation of organized accounting system, expenses of operation greater when compared to gross sales, Non updating of new items, Menu list not being costed properly or not documented regularly, Level of food and beverage not being accounted or cost accuracy with controversy in accounting tally conclusion. Financial output and input data with proper review not been collected at regular intervals. Financial input being inaccurate. The liabilities which are comparatively higher than the assets which will be hurdle to pay the future bills. Inability in current cash note which set the owner to rely on online bank balance. Misunderstanding and lack of involvement is analysing the financial statements such as balance sheet, profit loss statement, variable costs, fixed costs, expenditure of the month and full financial data properly. (Douglas, 2003) The new innovative ideas such as voucher meals, free single course meal, offer price cuts and so on will not only add income to your account but also proper accounting and upgrading specification of each offer to the system, so as to maintain proper accounting format. With competitive features in mind, Introducing new combo deals and recipes meeting the restaurant budget must be planned financially before execution. (Bernard , 2008). If these basic hazards perception is succeeded then it will be a positive increase to maximise the marketing and quid. ALIGN BASEMENT TO BEGIN BETTERMENT Restaurants are now in vein to hit profit due to the economy. Even the profit stabled restaurants are now couldn’t cope balanced and many are just opened for the status they reached. So in this hectic situation to recall the basic techniques follow the formulas to build betterment in the base line will drag the profit in. Presence and Awareness of the Owner: The Owner’s absence is always an advantage for the workers unless an exemption, the degree of work quality and speed will always be up in the owner’s presence. Not only is the presence required but also the awareness towards the customers need and satisfaction. To let the workers know that you are aware of the standard food quality, perfection and serving the consumers up to their expectation ever. Forecasting and Maintaining Daily Figures: To beat the best restaurants, it is necessary to know the monthly, weekly, daily figures and fortnight graph to reach the profit goal fast, have proper regular list of the meal counts, wages, variable and fixed cost, to analyse the requirements and put periodic new counts to improve and always let the employees know that u give them full support but not lenient towards the business. Consumers are the Pillars: The credit crunch has not only made the consumers look for a great service and quality food but also a value meal and cost cut meal deals. As per the proverb â€Å"First impression is the best impression† it is always must to keep in mind that to meet regular profit input we must have regular customers in, so its is basic to keep customers satisfied and comfortable always and never let them to get bad impression towards the restaurant or the service. The service with charm in face, attentive behaviour with politeness and patience, best food with better presentation will all help you attract the consumers. Advertise to Reach: From special diner delights, credit crunch value meals, food festive and so on will put you in quotation at daily papers which gives great publicity. Put extra amount during season to reach and keep customers standard and stable. Be flexible and appreciative towards the change in interior and menu which meets the trend and audience requirement. The website designed for the restaurant which covers all the necessary details to book, contact and choose from your restaurant will let public reach you soon. (Michael F, Jayne G, 2002) INAGURATE A NEW RESTAURANT IN CREDIT CRUNCH New Restaurants are opened with innovative menus in this steep economic downfall in Northern Ireland. But How? This remains as finger crossed questions to many. The Tim Boner, Manager of the newly opened Cocos in Belfast Answers its all about pricing the menu right. By analysing the high end restaurants hit, they re modelled, renovated, and re launched it with cheap cost menu which works well. They find subsequent growth and gain even in this recession time and that matters and becomes possible only with a policy of good service, good quality and good price meals. â€Å"Today is never late than Tomorrow† is a old saying, so to execute the restaurant launch during recession is not a bad choice because successful firm can sustain anywhere and anytime. Thus utilizing the media, brochure distribution, website and adverts restaurant launch can be made to reach the people and will be key to promote sales as well, Introduce recipe choice, introduction discount offers, atmospheric comfort, feedback receiving etc to create good impact about the new restaurant among the public. The calculative and practical business plan which is well executed will definitely succeed in any circumstance. The Manager of the credit gained restaurants says that â€Å"if the Formula is False, The failure is sure even if no crunch in credit economy. The phobia of recession was a hit as the failing people fail faster and find a reason for it . But yet for achievers it is obviously a mile stone and bonus pride when succeeded. The Restaurants are now found rock and roll, closing down often with out realising the tip that spending more time and mind would give them gain. Scheduling and dedicating more will definitely bring in money says the Orchard County-based chef. ELEMENTS OF FAILURE ?Lack of documented strategy; only informal or orally communication of mission and vision; lack of organizational culture fostering success characteristics. Inability or unwillingness to establish and formalize operational standards; seat-of-the-pants management. ?Frequent critical incidents; managing operations by â€Å"putting out fires† appears to be a common practice. ?Focusing on one aspect of the business at the expense of the others. ?Poor choice of location. ?Lack of match between restaurant concept and location. ?Lack of sufficient st art up capital or operational capital. ?Lack of business experience or knowledge of restaurant operations. ?Poor communication with consumers. ?Negative consumer perception of value; price and product must match. For ethnic restaurants, loss of authenticity; for all restaurants, loss of conceptual integrity. ?Becoming everything to everyone; failure of differentiation or distinctiveness. ?Underestimating the competition. ?Lack of owner commitment due to family demands, such as illness or emotional problems. ?Lack of operational performance evaluation systems. ?Frequent changes in management and diverse views of the mission, vision, and objectives. ?Tardy establishment of vision and mission statements of the business; failure to integrate vision and mission into the operation; lack of commitment in management or employee ranks. Failure to maintain management flexibility and innovation. ?No controllable, external factors, such as fires, changing demographic trends, legislation, econom y, and social and cultural changes. ?Entrepreneurial incompetence; inability to operate as or recruit professional managers(Bernard,2008) QUESTIONARE 1. Have you cut down eating in restaurant due to recession? 2. If yes what is the percentage of reduction? 3. Will Home Delivery services increase your order to Restaurants? 4. Do you think a price cut in Restaurant food may improve your Restaurant Visits? 5. Do you order food based on special offer or choice of item? . Do you like to remind you about the Menus and special Menus for your weekend order? 7. Are you interested in us to cook your choice of food on your behalf and do door delivery? 8. Are you interested in cheaper food to manage the recession? 9. If you would like to reduce the transport cost due to recession, do you prefer restaurants to deliver and serve food at your garden? KEYS FOR RESTAURANTS TO REFRESH IN RECESSION To avoid the fall off in Recession t-tsunami†¦Restaurants can switch to pliability in price list an d use magnetic key lines for customer allurement and let the concurrence of the team lay stagnant. Sketch competitive bullets to hit the profit with no pain for consumers’ wallets†¦ PLIABILITY ?To invigorate the price sensitive customers, design a make over menu with discount combo meals, cost cuts in dishes, family meal deals, Price cut in Take Away,. ?To induce the demand always maintains quality and best taste which competes the best standard in the restaurant market. ?To keep the customers flooding in, introduce free meal next visit vouchers for family dinner or party and free desert or starter for a plural combo and such innovations beating the restaurants budget. CONCURRENCE OF THE TEAM To keep your restaurants name as first ever choice, BOLD you in ads utilizing the public relations, magazines and medias, create a attractive website to reach public ? Let the team of the restaurant be chained and very cooperative in a way that every ones uplifting ideas shall be considered, ? Chef shall improve in presentation, taste and create new recipes, make signature special delights to welcome the customers again, ? Waiters shall express more hospitality and design appealing tables, ? Provide warm welcome with traditional or trendy touch relevant to customer’s choice. Store keeping must be modified and sketched according to the menu and demand. ?Make creation and innovation in the restaurants outlook which matches the region of the menu. (Bernard, 2008) TIPS FOR RESTAURANT TOPUP ?Healthy skepticism in choosing the staffs, reducing the working hours instead of winding up the staffs will avoid acrimony and develop a positive work atmosphere. ?Brochures with cook tips and recipes with a health note to the customers will gain more appeal. ?Entertainment features like music, Lcd TV, will make the dine more lively ? Play corner with toys equipped for kids will comfort and relax the family ? Lucky dip coupons for each bill with winning price of family free dinner or tour trip would drag in the public ? If there is a break down in kitchen wares, try to repair than replacing. ?Improvising the customer service with more privileges and patience ? Home delivery for low price will help to lift profit ?Conduct food festivals of different regions and prepare delicacies. ?Feed back from the customers could help improvise the service(Douglas, 2003) ELEMENTS OF SUCCESS ?Have a distinctive concept that has been well researched. ?Ensure that all decisions make long-term economic sense. Adapt desirable technologies, especially for record keeping and tracking customers. ?Educate managers through continuing education at trade shows and workshops. An environment that Fosters professional growth has better productivity. ?Effectively and regularly communicate values and objectives to employees. ?Maintain a clear vision, mission, and operation strategies, but be willing to amend strategies as the situation changes. ?Create a cost-conscious culture, which includes stringent record keeping. ?Focus on one concentrated theme and develop it well. Be willing to make a substantial time commitment both to the restaurant and to family ? Create and build a positive organization culture through consistent management. ?Maintain managerial flexibility. ?Choose the location carefully, although having a good location seems to be more a moderating variable than a mediating (causal) variable in restaurant viability. REFERENCE †¢Menu engineering: a practical guide to menu analysis Michael L. Kasavana, Donald I. Smith ,(1982). †¢Color in interior design , John F. Pile (1997) †¢Restaurant confidential: the shocking truth about what youre really eating , Michael F. Jacobson, Jayne G. Hurley (2002) †¢The marketing casebook: cases and concepts? , Sally Dibb, Lyndon Simkin Business Economics 1994 †¢Restaurants, clubs bars: planning, design and investment for food service Facilities, Fred Lawson – 1994 †¢The 2006-2011 World Outlook for Indian Ready Meals By Icon Group International, Inc. Staff †¢Food and beverage management, Bernard Davis, edition 4, 2008. †¢The restaurant: from concept to operation, John R. Walker, Edition – 5, 2007. †¢The restaurant managers handbook: how to set up, operate, and manage a restaurant, Douglas Robert Brown, Edition – 3, 2003. www. eatoutmagazine. co. uk †¢www. ausfoodnews. com †¢www. restaurant-hospitality. com †¢www. scribd. com †¢www. caterersearch. com †¢www. eatout. com CONCLUSION Our study indicates that Attributes such as restaurant density, firm size, and managerial characteristics are important to success. The Owner-Manager must have the requisite skills to run a restaurant. While the restaurateur should plan carefully in growing the business. To Plan the situation matters than to blame the situation. The Restaurant failure rate is affected more by internal factors than by external factors, although both apply.