Improving Food and Beverage Performance (Hospitality Managers Pocket Books)

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Comments and advice will be generalist in nature, specific examples will be provided where there is clear differentiation. Why am I in business? Who are my customers? How can I remain successful? When should I be reviewing operational performance? Where can I look for further advice?

The question who, might include: customers, suppliers, staff, owners, investors and competitors. Do not accept the obvious answers; be more inquisitive.

This text recognizes and aims to ensure that the successful food and beverage manager will be able to: Recognize opportunities and constraints within the current business environment. Introduction xvi i Understand internal and external influences on the nature of effective food and beverage provision.

Recognize the implications of strategic and tactical planning for customers, personnel and resource management. Develop some understanding of what may happen in the future. Recognize and plan for continuing change in menus, products and systems. Suggested additional reading Jones, P. This page intentionally left blank 1 Customer-centred performance improvement Aims and objectives This chapter aims to show how improving products and services for the customer can reap benefits for the caterer. Cutting cost is not and should not be the only way to increase profit.

If an operation is to be successful then any strategy development must involve reference to the customer. Even where the main objective is to improve profit performance this cannot be achieved without knowledge of the market conditions, including customer analysis. Further, it may be argued that the only way to improve profit performance is by meeting customer needs more effectively. The effective food and beverage manager needs to clearly understand the operating environment: the market, customer needs, wants and expectations.

Thorough knowledge of resource availability will enable effective and economic plans to be produced. Source: Davis and Stone, The significance of sectors While Figure 1. It could be argued that many of the more recent success stories in our industry result from the fact that they did not conform to the accepted industry norms.

It is true that such classification is used for the presentation of statistics from which we can compare our own performance against competitors.

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But such a narrow measure may be what is actually holding us back. Keeping pace with the immediate competition leads to complacency. If I manage a public house with a 60 per cent GP on food, then I am doing well because that is the industry standard. Customer-centred performance improvement 3 But restaurants and hotels are managing 65 per cent. Table 1. Operations should try to review operational performance on its own merits without reference to sector norms. How well are we meeting our own targets, how innovative are we, can we attract business from other sectors?

Categorizing catering operations as private commercial or public welfare is no longer relevant in terms of performance improvement.

The benefits of moving away from the old welfare concept of annual budgeting has been welcomed by most managers. Although threatened by privatization and market testing competitive tendering welfare manages now have greater control over their operations and are using commercial techniques to good effect.

What little remains of the privatelpublic divide may be found in the tendency for operations to be either profit or cost centred, measuring their performance primarily against profit or cost targets. Because 4 Customer-centred performance improvement a high street restaurant will have relatively high fixed costs, rent and rates, it is likely to be profit centred. Rent and rates attributable to a caterer operating within a hospital may be more difficult to attribute identify and allocate a cost for consequently hospital catering managers will tend to concentrate on variable costs.

To suggest that all private operations are profit centred and all welfare operations are cost centred is an over-generalization. Emphasis of management activity Profit centred Cost centred Figure 1. One operation is concerned with revenue and the other is concerned with cost. Consider two operations which are both currently operating at the same break even point.


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They both want to improve their performance, become more profitable. Both would benefit from increased volume and reduced costs, but where should management effort be concentrated? Little t o be gained from management of variable costs. Little t o be gained from increasing volume, variable costs will continue increasing at the same rate. Both operations may currently be in the same position, have the same total revenue and the same volume of sales. However, future strategy potential for performance improvement is quite different in each case.

The operation with high 6 Customer-centred performance improvement fixed costs should concentrate on increased volume through quality and value. The operation with low fixed costs will need to review carefully reduce variable raw material costs in order to increase unit margin. The arguments above are based on a perspective which suggests that organizational strategy is still based on traditional, sectoral, concepts.

Such targets objectives are outdated; a good GP percentage performance is no guarantee of real net profit. We need to look at our operational performance differently. The purpose of this text is to demonstrate that whilst the above forms of analysis may be important for strategic development, they are in many respects of secondary importance.

All catering operations should primarily be customer centred; financial strategy can then be developed from that base. Putting the customer second only results in worsening, not improving, performance. What is happening out there? Davis and Stone provide an interesting view of the business environment Figure 1.

The prime reasons for people eating out socially are: A special occasion or treat. Meeting friends. A change from home. This immediately suggests a very simple division of the market into two basic Customer-centred performance improvement 7 External enuimnntent government Central government Social change International and national stability Shareholders or o y e r s Figure 1.

Such differing needs and spending opportunities must be appreciated by the caterer. Current forecasts show the potential for major growth in the hospitality industry over the next few years see Table 1. Value Lb Change Choice of venue is likely to be influenced primarily by price supported by personal recommendation.

Improving Food and Beverage Performance Caterer and Hotelkeeper Hospitality Pocket Books - AbeBooks

The most popular types of establishment are steak houses, pubs, Chinese and Indian restaurants. Food choices seem to vary very little but, when asked, customers frequently suggest that variety and novelty are desirable. Customer-centred performance improvement 9 Table 1. Percentage 56 35 30 24 23 23 21 19 16 14 10 8 5 2 12 Customer-centred performance improvement Table 1. Percentage 70 58 37 25 24 22 13 13 12 9 4 4 Customer-centred performance improvement 13 Table 1. All too often operations target performance improvement in particular aspects of their operation without a clear appreciation of the relationship with other elements or the significance of improvement in regard to the ultimate aim.

Hospitality Industry Articles 2018

It is possible, for instance, continuously to refine and improve the production process and yet have no significant effect on sales customer response or cost savings. Managers should focus attention on the customer and produce quality products in response to identified need at the right price. As a consequence of this, a more rational approach to performance improvement in staffing, systems, products and resource management will be apparent.

As can be seen, the gap between young and old consumers will have disappeared by the first decade of the new century and the balance is likely to be reversed thereafter. Market forces relate to current socio-economic activity, particularly the amount of money in the economy. Social issues like the way we regard affluence and the flaunting of money, which often takes place within a hospitality context, will have a considerable effect on our industry regardless of the amount of money people have to spend.

Some sectors of the industry, such as corporate entertaining, may be affected more than others. Other social factors like the drive for Income per week f under 2.

Approximate figures based on available government statistics. Note that up until the f mark, spending on alcohol is greater than on food.

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There has been a polarization of the restaurant industry, the gap between moderately priced and expensive meals is increasing, with little on offer between the two. This may be because the benefits of the mid-range restaurant are unclear.

Brian Burwell

Expensive meals offer extravagance, popularly priced meals offer value. What can we offer between? The relationship of catering with other industries is significant. The nature of competition is also an important consideration. Competition tends to hold prices down and the need to remain competitive places extra demands on the manager. This is particularly true of the highly competitive, popularly priced, restaurant sector.

By far the most important element of market forces is the consumer. It has been suggested that the catering industry is not sufficiently innovative.