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The Restaurant Business
BBAA - 110
The Outlook for Food Service
• The changing picture of life in the twenty-first century
shows that fewer people have time to prepare meals
• This means we purchase more convenience food items
and eat more food away from home or purchase prepared
food to eat at home
• People recognize that purchasing meals in restaurants
provides opportunities to socialize or allows more leisure
time that otherwise would have been spent on cooking
and cleaning.
Restaurants
• The word restaurant covers a broad range of
food service operations
• The term comes from the French word
restaurant, meaning “restorer of energy”
• Describing the restaurant business is like trying
to hit a moving target
– The restaurant market is constantly changing
• There are so many types of restaurants that it is
difficult to devise a model to fit them all.
• Nevertheless, we need some basic terminology
to describe the field, even if in general terms.
• Restaurants are commercial outfit, which
specialize in the preparation of quality food and
to serve them to satisfy the customer’s
demands
• Restaurants have state of the art kitchens in
their premises, where food items are prepared,
following a fixed menu to serve the customers
• Restaurants are equipped with infrastructure
facilities, table settings, dining halls of various
sizes to cater the needs of small to large
gatherings, trained personnel to provide
satisfactory service.
• Many restaurants are features of hotel
– Such restaurants are open to non-residents also
The Dining Market and the Eating Market…
• Consider the basic distinction between the dining
market and the eating market
• Dining operations such as fine-dining and casual-
dining restaurants,
• Rapidly growing off-premise operations such as
takeout and delivery (much of which is referred to
as home meal replacement), that are accounting
for major growth in the eating market.
Classification of Restaurants
• Upscale Restaurants:
– High quality cuisine at a high end price
– Offer full service and have a high quality of ambience
• Mid Restaurants:
– Offer full meals at a medium price
– Can be of full service, buffets, of limited service
• Quick Service Restaurants:
– Fast-food restaurants
– Limited menus that are prepared quickly
– Usually drive-thru window and take-out
– May also be self-service outfits
Types of Restaurants
Cafeterias
• Serve mostly cooked food, arranged behind a food-serving
counter.
• Little or no table service.
• A customer takes a tray and pushed it along a track in front
of the counter.
• Servings may be ordered from attendants, selected as
ready-made portions already on plates, or self-serve of
food of own choice.
• Beverages may be filled from self-service
dispensers or ordered from the attendants.
• At the end of the line a cashier rings up the
purchases.
• Trays are filled with selected items of food and
taken to a table to eat.
Fast-Foods
• These establishment emphasize speed of service and
low cost over all other considerations.
• Modern fast-food establishments lack cutlery or
crockery.
– The customer is expected to eat the food directly from the
disposable container.
• Various types of fast-food establishments:
– Customer collects food from a counter and pays,
then sits down and starts eating.
– Customer first pays at the cash desk, collects a
coupon and then goes to the food counter
– Customer is at the counter; after preparation the
food is brought to one’s table; paying may be on
ordering or after eating
– Drive-thru is a type of fast-food restaurant without
seating
Casual Dinning
• Establishments that serve moderately priced
food in a casual atmosphere
• Except for buffet-style, establishments typically
provide table service
Fast Casual-Dinning
• Similar to a fast-food service (i.e., does not offer
full table service)
• Average prices charged are higher than fast-
food prices and non-disposable plates and
cutlery are usually offered
• This category is a growing concept that fills the
space between fast-food and casual dinning
Cafes/Coffee Shops
• Offer a range of hot meals and sandwiches
• Offer table service
• In some areas, cafes offer outdoor seating
Coffee Houses
• Casual units without table service that emphasize
coffee and other beverages
• Limited selection of cold foods such as pastries
and perhaps sandwiches are offered as well
• Their distinguishing feature is that they allow
patrons to relax and socialize on their premises for
long periods of time without pressure to leave
promptly after eating
Making a Profit in Food Service Operations
• The purpose that
underlies the logic of
any business is to
make a profit
• Three stakeholders of
any (foodservice)
business:
Business
Customers
EmployeesOwner
• There are two basic approaches to increasing
profit:
– One is to increase sales;
– The other is to reduce costs.
• Most commonly, operators try to do both to the
limits of what will make sense for all
stakeholders
Increasing Sales
• The two basic approaches to increase sales are to
sell to more people or to sell more to your present
customers—or to do both
• Increasing the customer base is usually thought of
as the job of marketing (and specifically,
advertising and promotion)
• A superior operation that achieves a good
reputation may build its customer base through
word-of-mouth referrals
• Another approach is to increase sales to the
customers you now have—that is, to increase
the check average
– One obvious way to do this is simply to raise prices
– Some effective approaches to increase the average
check are menu redesign, “bundling” of food items,
and suggestive selling
• Operators often offer prizes or bonuses for the server
most effective in selling
Reducing Costs
• Just as raising prices faster than the competition
will drive off customers, so will cheapening quality
through the use of inferior ingredients or smaller
portions.
• Thus, reducing costs must result from improved
efficiency:
– Involves more careful scheduling of employees,
improved portion control, and more careful monitoring
of the issue and use of supplies
• If cost reductions come from improved
efficiency rather than cheapening quality, they
will have a greater impact on profit
Thanks

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Restaurant business

  • 2. The Outlook for Food Service • The changing picture of life in the twenty-first century shows that fewer people have time to prepare meals • This means we purchase more convenience food items and eat more food away from home or purchase prepared food to eat at home • People recognize that purchasing meals in restaurants provides opportunities to socialize or allows more leisure time that otherwise would have been spent on cooking and cleaning.
  • 3. Restaurants • The word restaurant covers a broad range of food service operations • The term comes from the French word restaurant, meaning “restorer of energy”
  • 4. • Describing the restaurant business is like trying to hit a moving target – The restaurant market is constantly changing • There are so many types of restaurants that it is difficult to devise a model to fit them all. • Nevertheless, we need some basic terminology to describe the field, even if in general terms.
  • 5. • Restaurants are commercial outfit, which specialize in the preparation of quality food and to serve them to satisfy the customer’s demands • Restaurants have state of the art kitchens in their premises, where food items are prepared, following a fixed menu to serve the customers
  • 6. • Restaurants are equipped with infrastructure facilities, table settings, dining halls of various sizes to cater the needs of small to large gatherings, trained personnel to provide satisfactory service. • Many restaurants are features of hotel – Such restaurants are open to non-residents also
  • 7. The Dining Market and the Eating Market… • Consider the basic distinction between the dining market and the eating market • Dining operations such as fine-dining and casual- dining restaurants, • Rapidly growing off-premise operations such as takeout and delivery (much of which is referred to as home meal replacement), that are accounting for major growth in the eating market.
  • 8. Classification of Restaurants • Upscale Restaurants: – High quality cuisine at a high end price – Offer full service and have a high quality of ambience • Mid Restaurants: – Offer full meals at a medium price – Can be of full service, buffets, of limited service • Quick Service Restaurants: – Fast-food restaurants – Limited menus that are prepared quickly – Usually drive-thru window and take-out – May also be self-service outfits
  • 10. Cafeterias • Serve mostly cooked food, arranged behind a food-serving counter. • Little or no table service. • A customer takes a tray and pushed it along a track in front of the counter. • Servings may be ordered from attendants, selected as ready-made portions already on plates, or self-serve of food of own choice.
  • 11. • Beverages may be filled from self-service dispensers or ordered from the attendants. • At the end of the line a cashier rings up the purchases. • Trays are filled with selected items of food and taken to a table to eat.
  • 12. Fast-Foods • These establishment emphasize speed of service and low cost over all other considerations. • Modern fast-food establishments lack cutlery or crockery. – The customer is expected to eat the food directly from the disposable container.
  • 13. • Various types of fast-food establishments: – Customer collects food from a counter and pays, then sits down and starts eating. – Customer first pays at the cash desk, collects a coupon and then goes to the food counter – Customer is at the counter; after preparation the food is brought to one’s table; paying may be on ordering or after eating – Drive-thru is a type of fast-food restaurant without seating
  • 14.
  • 15. Casual Dinning • Establishments that serve moderately priced food in a casual atmosphere • Except for buffet-style, establishments typically provide table service
  • 16. Fast Casual-Dinning • Similar to a fast-food service (i.e., does not offer full table service) • Average prices charged are higher than fast- food prices and non-disposable plates and cutlery are usually offered • This category is a growing concept that fills the space between fast-food and casual dinning
  • 17. Cafes/Coffee Shops • Offer a range of hot meals and sandwiches • Offer table service • In some areas, cafes offer outdoor seating
  • 18. Coffee Houses • Casual units without table service that emphasize coffee and other beverages • Limited selection of cold foods such as pastries and perhaps sandwiches are offered as well • Their distinguishing feature is that they allow patrons to relax and socialize on their premises for long periods of time without pressure to leave promptly after eating
  • 19. Making a Profit in Food Service Operations • The purpose that underlies the logic of any business is to make a profit • Three stakeholders of any (foodservice) business: Business Customers EmployeesOwner
  • 20. • There are two basic approaches to increasing profit: – One is to increase sales; – The other is to reduce costs. • Most commonly, operators try to do both to the limits of what will make sense for all stakeholders
  • 21. Increasing Sales • The two basic approaches to increase sales are to sell to more people or to sell more to your present customers—or to do both • Increasing the customer base is usually thought of as the job of marketing (and specifically, advertising and promotion) • A superior operation that achieves a good reputation may build its customer base through word-of-mouth referrals
  • 22. • Another approach is to increase sales to the customers you now have—that is, to increase the check average – One obvious way to do this is simply to raise prices – Some effective approaches to increase the average check are menu redesign, “bundling” of food items, and suggestive selling • Operators often offer prizes or bonuses for the server most effective in selling
  • 23. Reducing Costs • Just as raising prices faster than the competition will drive off customers, so will cheapening quality through the use of inferior ingredients or smaller portions. • Thus, reducing costs must result from improved efficiency: – Involves more careful scheduling of employees, improved portion control, and more careful monitoring of the issue and use of supplies
  • 24. • If cost reductions come from improved efficiency rather than cheapening quality, they will have a greater impact on profit

Editor's Notes

  1. Ambience is the character and atmosphere of a place.
  2. A fast casual restaurant, found primarily in the United States, does not offer full table service, but promises higher quality food than other fast food restaurants (with fewer frozen or processed ingredients). It is an intermediate concept between fast food and casual dining, and typically priced accordingly.
  3. Customer: Employees: who seek a good place to work and a decent living Owner: Without profit, funds to renew the business—to remodel, to launch new products or services, to expand to serve a changing market—and keep employees on the payroll are just not available.
  4. Menu redesign can be accomplished through the actual redesign of the menu, repositioning the menu items to draw attention to high-profit items or changing (or removing) menu items. Each of these strategies can contribute to encouraging the customer to spend more and to purchase higher-profit items. Bundling is another strategy that can result in the same thing. One of the most common bundling strategies is the combination meal. Several items that are sold separately—for instance, a hamburger, French fries, a soft drink, and dessert in the quick-service arena—are sold together for a price that is less than the price of each sold separately. Suggestive selling is another potentially effective technique for increasing sales. Common targets for increased sales are appetizers, side dishes, wine, desserts, or after dinner drinks, although main courses should not be overlooked.
  5. Generally, the key to reducing costs is a careful review of the operation to find places where waste can be reduced without loss of quality. Following such a review, realistic standards are set, and performance is monitored against those standards