Industry Analysis & Industry Trends
The Full-Service Restaurants industry has endured a difficult time over the past five years. The economic downturn caused many consumers to cut back their discretionary spending on activities such as dining out. Some traded down to cheaper takeaway options or chose to cook at home instead. Changes to government regulation and policies concerning wage costs, alcohol tax and food safety have prevented growth. Industry profitability is estimated to have dropped because of declining patronage, falling prices and rising labour and food costs. Several struggling operators have been forced to exit the industry but some have found opportunities to expand their operations... purchase to read more
Industry Report - Industry Investment Chapter
The industry operates in a labour-intensive environment. For every £1.00 that industry operators spend on capital, an estimated £11.70 is spent on labour, illustrating a low level of capital intensity. Capital expenditure includes fitting out the restaurant by installing a commercial kitchen and providing tables and chairs, crockery and cutlery. Typically, many of these items are leased rather than purchased. This conserves working capital and lowers the cost of entry. Therefore, with the exception of the initial capital investment required to establish or purchase a new restaurant, the daily demand for capital is low.
Restaurants emphasise customer service and therefore require a significant amount of labour to operate efficiently... purchase to read more