Food and Beverage
With the increasing globalization, there has been an increasing competition in every sector, hospitality not excluded. Restaurants have, therefore, had to come up with the necessary strategies to enable them remain competitive. The case study gives a fiction on the management of a food and beverage restaurant, the Bellini Italian Restaurant. It is owned by Francesco Del Piero. Its capacity has been78 seats and has been having Ala carte in its menu with approximately 39 guests visiting it each day. The concern is that the restaurant has not been performing well during the weekdays and is coming up with a new strategy to enable it pick up again. It is projected that with the introduction of an "all you can eat" buffet concept, the owner of Bellini Italian Restaurant will be able to increase the overall sale volume and profitability of his business.
Discussion of the strategy of "all you can eat" and what it will do to the "Food Average Spend"
The strategy for "all you can eat" will increase the average food spending from the current $36.15. Introducing the "all you can eat" concept on Monday, Tuesday and Wednesday at a reduced cost of $28.90 will result in many clients visiting the restaurant during the weekdays. Besides, the inclusion of children who will be paying $12.50 is likely to increase sales during the week. Customers, particularly those with children will consider the reduction of food spends from $36.15 to 28.90 a great reprieve for their pockets, but in essence, they will be paying an additional $12.90 for any of the accompanying child. In the end, food cost percentage will reduce from the current 32% because the restaurant owner will have to buy more food to cater for the increased number of customers. Undoubtedly, buying in bulk to cater for the increased number of customers will result in economies of scale (Celli, 2013). Notably, economies of scale is an advantages related to cost resulting from increased output of a given item, in this case food spend. Economies of scale occur as a result of the inverse relationship that exists between the quantity produced and cost per unit. The greater the quantity produced, the lower the cost per unit because the costs are spread over a large number of goods. Similarly, the restaurant's food cost percentage will drop from the 32% that it is currently because of cost advantage and economies of scale.
The key information to be monitored over the next few weeks to measure the results of this strategy
- Customer visitation and perception
It is expected that customer visitation and perception will improve over the next few weeks because of the proposed strategy of "all you can eat." Customers' perceptions about food and service attributes are crucial in influencing behavioral intentions as well as satisfaction in the food industry (Donkoh, Quainoo, Cudjo and Kaba, 2012). Customer visitation will increase because of food prices that are expected to drop as a result of the proposed strategy. It is noteworthy that the price of a product is related to perceived value. The customers have never complained of food quality, but seem to have been discouraged by prices that were considered expensive. Perceived price is the price that the customer considers acceptable, reasonable as well as fair compared to competitors. Customers are likely to return if they perceive prices to be fair. However, if customers perceive prices to be unfair then they will complain and eventually defect to other restaurants (Donkoh et al., 2012).
The other aspect that is supposed to be monitored is service quality. Service has become an important element of the global economy. It is the type of performance as each encounter allows the food service restaurant personnel to undertake actions and activities of the value to the customer. Service quality is the judgment or appraisal of the superiority of the food product or service on offer as well as the degree and the nature of how the perceived quality, expected quality as well as the quality of the service that is finally delivered compare. Perceived quality service implies the restaurant knowing its customers, managing employees to meet customer needs, as well as delivering promises to customers. The elements of service quality that will be expected from the restaurant in the next few weeks include tangibility, responsiveness, reliability, assurance, as well as empathy (Naude and Rudansky-Kloppers, 2016). The tangibles that will be used to measure results include physical appearance of the restaurant, the equipments used, personnel as well as the materials that will be used to communicate with customers. The other dimensions that will affect the outcomes in the next few weeks include space, cleanliness, atmosphere, location and appearance. The elements of responsibility and reliability that will have to be measured include speed, accuracy, willingness to respond as well as dependability. Even though food quality and service are vital, a pleasing atmosphere can contribute to overall satisfaction of the customer as well as his or her subsequent patronage. Environmental elements in the restaurant that will impact on the emotional responses of the customer include lighting, temperature, music, scent, smell, as well as furnishing (Naude, and Rudansky-Kloppers, 2016).
- How much food is prepared every day towards the buffet and ways of dealing with carry-overs as well as wastages
The amount of food that will be prepared for daily buffet will determine if more customers are coming to the restaurant or if only a few customers are coming. In case more customers will be coming to the restaurant as a result of the strategy; then, more food will be purchased and prepared. Besides, more food could be prepared if customers decide to buy more than they were buying due to the reduced prices. However, if only a few customers choose to come to the restaurant as a result of the proposed strategy then less food will be prepared.
The first way to deal with the issue of carry-overs is to avoid over-buying food stock. Del Piero should ensure that he only purchases the ingredients that the business will use within a given period. Even though Del Piero can attempt to stock or buy in bulk, particularly where the supplier promises a good deal, going off-piste from the shopping list is likely to leave him with more food than he needs. It is no doubt that this food will potentially go to waste if left to spoil in storage. If more food is stored and eventually spoils or goes to waste, then it could imply that the strategy will have not worked. It is also important to ensure that freezes and fridges run at the right temperature and low-risk foods are stored on higher shelves than higher risk foods (Davis, Lockwood, Alcott and Pantelidis, 2012). Storing foods under correct conditions is critical in preserving their quality as well as preventing pathogenic organisms that are likely to quickly cause food waste. Similarly, using the First in, First Out (FIFO) rule when storing food will ensure that newer stocks are routinely placed behind older stocks, while older stocks are used first before they can go to waste. This can reduce the cost of purchasing food (Onyeocha et al., 2015). Good temperature control will prevent the growth of pathogenic microorganisms, meaning that food waste is unlikely because food will not spoil.
Del Piero will have to put in place a stock inventory that will help to know the foods in stock at all times. The owner will need to keep a detailed list of foods in all the storage areas of the restaurant with information on use dates that he can easily refer to. This helps to avoid forgetting some foods that will eventually go to waste.
The restaurant owner will have to ensure portion control. He will need not to focus on offering customers oversized portions; instead, he will have to ensure that the customers get quality food. Customers are likely to leave their foods at the end of their meals because they are provided with extra portions or foods that they did not ask for. While Del Piero will anticipate demand to increase, this will have to be done with care. He will have to think carefully about the amount of food that will be prepared in advance. Large batch cooking implies that food is unlikely to be used before it goes past the expiry date (Dopson and Hayes, 2016). Even though batch cooking can save time, it also has the potential of creating wastes of food and money. Finally, Del Piero will need to ensure that customers get more menu options. For instance, giving customers more choices over what they would want to be included or left out of their meal is necessary to prevent any food from going to waste.
The different contribution margins (buffet vs. a la carte)
The number of customers opting for the proposed buffet will be compared against that of the usual a la carte. In running a buffet, Del Piero could consider using a pay by weight system to enable customers eat as much as they want but at the same time discourage them from eating too much. In a buffet system, meals will be placed in a public area where customers will be able to serve themselves. This method is convenient for feeding a large number of customers with minimal staff (Davis et al., 2012). Many people like buffet because they have the chance to directly see the food items and choose what they want and how they want to eat it. Customers serve themselves from the selection available and do not have to wait for a table. In the usual a la carte system that the restaurant uses currently, customers are given a menu and choose what they want from it before the waiter come and take the order to prepare and serve customers. The buffet has the potential of contributing more to the margins if the servings meet different customers' needs. Therefore, it will be important to monitor if the proposed buffet will result in increased customer loyalty and satisfaction with the restaurant's food offering during on weekdays. Besides, buffets have a fixed price which will be measured against a la carte with different prices.
The overall effect on the sale volume and profitability
The proposed buffet is expected to increase the restaurant's sales volume on weekdays. It is expected that from the increased sales, the restaurant will make more profit than it is making currently. The profitability of the buffet will be measured in terms of how more profit the restaurant will have generated from the strategy than it is generating currently. If the restaurant earns less profit from the buffet than it currently earns from the a la carte, then it will be considered less profitable.
Critical analysis of how I would have investigated the problem
I would have investigated if food serving is a problem. I would seek to determine if the food is served in the correct portions and meet customer quality expectations. To achieve this, I would give customers questionnaires to fill after eating in the restaurants. The questionnaires would have questions regarding food quality, taste of food, pleasing appearance, healthy menu, freshness of food, availability of new food items, and appropriate temperature of food servings. Similarly, I would seek to get information regarding efficiency of the restaurant's services, staff friendliness, staff helpfulness, cleanliness of serving and eating areas, appearance of staff, hours of operation, location, as well as relaxed atmosphere of the restaurant. These are important factors that can significantly affect customers' perception of the restaurant. Having clear information from the questionnaires regarding customers' perception of these factors will help to decide whether to resort to buffet or to correct areas of weakness.
The strategies I would have implemented to improve the overall profitability of the restaurant
- First, I would have not removed the a la carte from the menu, but I could have provided it along side the proposed buffet. There could be customers who are so attached to a la carte that removing it from the menu would drive them away completely.
- Secondly, I would have created awareness about the restaurant and its food offerings through advertisement. From this kind of awareness, more customers would be expected to come to the restaurant, particularly during the week.
- Thirdly, I would have introduced the option of taking away where customers have the opportunity to carry food home or to wherever they are going. This is necessary where customers may not have time to eat in the restaurant.
In conclusion, it is, therefore, clear that with competition, coming up with an effective is not an option but a must to restaurants. With the strategy of "all you can eat", the owner of Bellini Italian Restaurant will be able to revive the business. For instance, the effect on the "Food Average Spend" will be very positive. However, for the restaurant owner to maximize the benefits of the new strategy, he will have to take certain steps. The very first thing will be effective monitoring the results of this strategy over time and making adjustments where necessary. The indicators identified are customer visitation and perception, the amount of food being prepared every day towards the buffet and ways of dealing with carry-overs as well as wastages among others. With such strategies, the restaurant's overall profitability of the restaurant will improve.
Celli, M. (2013). Determinants of Economies of Scale in Large Businesses - A Survey on UE Listed Firms. American Journal of Industrial and Business Management, 3, 255-261. //dx.doi.org/10.4236/ajibm.2013.33031
Davis, B., Lockwood, A.J., Alcott, P., and Pantelidis, L. (2012). Food and Beverage Management 5th ed. London: Routledge.
Donkoh, S.A., Quainoo, A.K., Cudjo, E., and Kaba, N.C. (2012). Customer satisfaction and perceptions about food services on the University for Development Studies Campus, Ghana. African Journal of Food Science, 6(8), 216-223. DOI: 10.5897/AJFS11.078
Dopson, L.R., and Hayes, D.K. (2016). Food and Beverage Cost Control, 6th Ed New Jersey: John Wiley and Sons, Inc.
Naude, P., and Rudansky-Kloppers, S. (2016). Perceptions of customers regarding their expectations of service quality in South African full-service restaurants. International Business and Economics Research Journal, 15(2), 55-68.
Onyeocha, O.U.A., Anyanwu, L.A., Opoola, A., Ajoku, S.T., Yakubu, F.E., and Maduakolam, C.C. (2015). Food costing and control: a vital aspect of hospitality industry business. Pearl Journal of Management, Social Science and Humanities, 1(4), 60-68.