Traditionally, business leaders have looked at the trend in overall profit (or loss) for the group as a measure of success. Most will break this down by restaurant and/or geography to facilitate restructuring / growth decisions.
They will look at their profit margin compared with the competition and to improve margin, they will work the levers of increasing revenue and/or reducing the cost of goods sold.
But things have changed enormously in the past couple of years.
Disruption in the UK casual dining market from alternatives like Deliveroo, UberEats, Foodhalls, drive-throughs and others, plus the seemingly ever-increasing demands of a very fickle consumer means that this traditional approach to control simply doesn’t work.
Those who survive must differentiate themselves. They have to provide entertainment value, atmosphere and good food. And they have to do it more efficiently than the next person to sustain their place in a world of tight margins and fickle customers.
So rather than asking yourself "What is the root cause of the problem in our business? (Is it the theme, the menu, our cost base, our efficiency....), casual dining restaurants have to step back to discover the most profitable use for their resources.
The question should be "How do I work with what I have to make the most profit?"
We have a methodology for doing that...
