Please use this identifier to cite or link to this item:
http://hdl.handle.net/10397/74990
Title: | Restaurant operating expenses and their effects on profitability enhancement | Authors: | Mun, SG Jang, SS |
Issue Date: | Apr-2018 | Source: | International journal of hospitality management, Apr. 2018, v. 71, p. 68-76 | Abstract: | Restaurant firms need efficient cost management strategies due to highly competitive market conditions and the weak financial structure of the restaurant industry. In this regard, the objectives of this study were to examine the operating expenses of restaurant firms and their impact on profitability enhancement by business segment and firm size. This study found that high prime costs (food costs and salary expenses) could be a major concern for full-service restaurant businesses and cause lower profitability compared with their limited-service counterparts. Improving the operational performance of full-service restaurants depends on sophisticated cost retrenchment skills, such as balancing productivity and revenues while minimizing quality detrimental. Further, firm size had an impact due to economies of scale decreasing food costs. Nevertheless, managers of limited-service restaurants, especially large firms, need to consider improving food quality instead of relying on advertising effects to maximize profits. | Keywords: | Full-service restaurants Limited-service restaurants Operating expenses Prime costs Profitability Restaurant firms |
Publisher: | Elsevier Ltd | Journal: | International journal of hospitality management | ISSN: | 0278-4319 | EISSN: | 1873-4693 | DOI: | 10.1016/j.ijhm.2017.12.002 | Rights: | © 2017 Elsevier Ltd. All rights reserved. © 2017. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/. The following publication Mun, S. G., & Jang, S. (2018). Restaurant operating expenses and their effects on profitability enhancement. International Journal of Hospitality Management, 71, 68-76 is available at https://doi.org/10.1016/j.ijhm.2017.12.002. |
Appears in Collections: | Journal/Magazine Article |
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