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... Competitive forces, technological developments, consumer trends
and government regulations are a few of the factors that contribute to the
pressures of succeeding in business. As Olsen (1996) notes, for a business to
succeed, it is imperative to identify the threats and opportunities that exist
and meet these with appropriate competitive methods. Similarly, the volatility
of the restaurant market (Tse and Olsen 1990) highlights the importance of
understanding the factors that contribute to the success or failure of
restaurant and catering businesses.
Previous research in the small business sector suggests that prime
determinants of business success include the amount spent on marketing, the
quality of product offered and lower levels of debt (ONeill and Duker 1986).
Similarly, a more recent study indicated that clear and strategically focused
promotional and advertising activities are important components of restaurant
operational success (English, Josiam, Upchurch, and Willems 1996). ... In a review of a number of
studies concerning small business failure, English et al. ... Despite
this evidence, however, there appears little specific data pertaining to
restaurant and catering operations, particularly in the Australian context.
This paper details a study of restaurant and catering operators perceptions
of factors that either contribute to, or hinder, success in their industry.
The Australian Restaurant and Catering Environment
Data that is available concerning the Australian restaurant sector suggests
that, although busier lifestyles mean more consumers are dining out,
competition is intensifying due to the increasing availability of ready-to-eat
meals from supermarkets, delicatessens and butchers, as well as the overall
growth in the number of restaurants (Hing, McCabe, Lewis, and Leiper 1998). ... Such a backdrop for restaurant and catering operations means there
are continuous customer and business environmental challenges facing the
sector.
In Australia, the past decade has seen rapid growth in the size of the
restaurant industry, leveling out to around 20 000 businesses by the end of
1997 (A. ... Nevertheless, the number of restaurant and catering
businesses has continued to climb in Queensland, Western Australia, and the
Northern Territory (A. ... (1998), the typical sized business in this sector is
small to mid-scale. This growth potentially leads to more competitive
pressures being experienced by the Australian restaurant and catering
industry.
Employment within the industry has paralleled the growth in the number of
restaurant, cafe and catering businesses. In the period between 1994 and 1997,
the sector experienced employment growth in excess of 10% with a total of 163
000 persons employed in the restaurant industry (A. ... 5% increase in salary and wages expenses
in the sector between the 1994/1995 and 1995/1996 financial years (Australian
Taxation Office 1996, 1998). Hence, it appears that the Australian restaurant
industry may need to consider ways to balance rising wage and salary costs
with productivity and sales. ... , US),
whose front-line staff rely on tips and sales commission to supplement a low
basic pay, increasing payroll expenses may be of particular concern to
Australian restaurant operators. ... 1998c; Australian Taxation Office 1996, 1998). Such eroding
profits and increasing expenses signal significant challenges for restaurant
industry operators. Hence, a better understanding of what factors could either
assist or hinder operators may help prevent business failures.
McQueen (1989) suggests that four of the top ten reasons for business failure
are directly related to management effectiveness (i. ... , poor operations
management, poor management accounting, poor chief executive officer and poor
marketing/sales management). Yet the importance of developing some of these
skills through completing a tertiary course in hospitality or business studies
remains unclear. Some commentators suggest that the need for formal
qualifications is escalating, due to the increasing complexity of hotel and
restaurant operations, whereas others argue that there is no substitute for
experience (Lang 1991). Hence, determining operators views on management
qualifications may assist in further understanding the success or failure of
restaurant or catering businesses.
This article reports the results of a survey conducted to obtain detailed
information concerning Australian restaurant and catering operations. As part
of the survey, restaurant and catering owners/managers were given the
opportunity to voice their opinion, in an open-ended format, concerning
factors that either hinder or help their operation and whether operators
should be appropriately qualified. ... The questionnaire
sought information on a range of issues, including business profiling,
financial data and demographics. To optimise content validity, the questions
were developed in collaboration with an expert panel comprising eight members
of the national executive from the Australian Restaurant and Catering
Association (RCA). The key focus of this article is to report, on the section
that contained three open-ended questions seeking respondents opinions about
key factors affecting their business operations. The three questions were:
1 What do you believe are the most important factors of success in your
restaurant?
2 What do you think are the major obstacles/ difficulties in running a
restaurant these days?
3 Do you think restaurant managers and/or owners should be appropriately
qualified to run a restaurant? ...
As the nature of this section of the questionnaire was exploratory, such
open-ended questions identifying success factors, difficulties, and opinions
concerning managerial qualifications were considered preferable to
predetermined quantitative items (Zikmund 1989). ... A
low response rate was anticipated, partly due to the nature of mail-out method
and partly due to the expected heterogeneity of the restaurant and catering
sector (such as time constraints of managers, different educational levels,
different English language comprehension skills and similar response
constraints). ...
Questionnaires were mailed to 1 496 individual restaurants and catering
organisations that were members of the RCA. Forty-three questionnaires were
returned as undeliverable (mostly `left address)and six were returned
uncompleted (where the ownership had changed or the business was closing/had
closed down). ...
Results and Discussion
Two hundred and forty-nine respondents from the restaurant and catering sector
participated in this study. As many restaurant and catering businesses are
operated by a partnership, provision was made on the questionnaire for two
owners/managers to respond to demographic questions. ... 6%) were Australian-born and 11. ... Factors with an inter-rater reliability criterion of less
than 75% were referred to the second author for adjudication.
Approximate Word count = 4977
Approximate Pages = 19.9
(250 words per page double spaced)
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