Cost Control Methods of a Food Service Restaurant - Research Paper Example

10 July Cost Control Project Paper Restaurant The restaurant under analysis is Colony Café in Miami Beach Florida; the establishment goes by a number of aliases like Chef Vincent, Colony Bistro, Columbus Café, Mauro’s or Colony Restaurant. It is located in Ocean Drive, which is one of the busiest places in Miami Beach, and also has a steady stream of tourists from other parts of the country. For this reason, several visitors usually pass near Colony Cafe and eventually get enticed by its proximity to the Beach. This is usually a result of the restaurant’s outdoor poster, which promises buyers two drinks for one. When one enters the premises, one is likely to get impressed by its tropical outlook as well as the way the tables are arranged. The restaurant prides itself in the cocktails it serves as these come in large quantities and often cause visitors to try out the establishment in the first place. It also serves traditional dishes like the paella, which has shrimp, clams and mussels; the Cuban sandwich is also another star item on their menu. These food items have not garnered raving reviews from patrons as some feel that the drinks are watered-down and the sandwiches are highly defective (Doss 2). However, what is clear is that most of the clients value the convenience of the location as many of them are new to South Beach and would not wish to look around for other eateries. The Daily Meal classifies this business as the worst restaurant in America and several customers agree with the assessment as seen through their Yelp reviews. Most of the competitors are located along the same area; that is, Ocean Drive with Las Olas Café being one of the more formidable players in the business. They also sell Cuban sandwiches like Colony Café but make them in the proper way thus earning a steady stream of clients in the Miami Beach area. However, other restaurants in Ocean Drive have relatively poor customer reviews; Van Dyke’s Cafe and Déjà Vu restaurant are all within the same vicinity but are guilty of low-quality service as well. In fact, many reviewers claim that the entire Ocean Drive area is an amalgam of poorly-management restaurants. The area has lowered the bar for fine restaurant dining, and left many clients yearning for more; some believe that they have to visit neighboring Puerto Sagua to find decent food establishments. The restaurant’s challenges, opportunities and threats Colony Café suffers from a serious publicity problem; being branded as America’s worst restaurant is the last thing a business owner wants. The most commonly identified issue among customers is exorbitant pricing; people pay so much for relatively simply meals. For instance, one customer commented that he paid $125 for a platter of chicken wings, cheese and popcorn shrimp (Yelp 14). Others have paid $55 for happy-hour cocktails and complained that the prices were hidden in obscure locations so that buyers eating inside would not see them; ice teas cost $25 while simple seafood pasta is as much as $65 (Yelp 8). Many complain about the extra gratuity that they have to pay all waiters as it amounts to 18% of the bill, and the restaurant does not even consult clients before including the charges (Yelp 20). Some feel that the charges are rip offs because they often get tricked into buying a certain item and then get slapped with a bill that they did not expect. They even claim that their bills rarely reflect the discounts advertised on the outdoor poster about getting two drinks for one. Charging exorbitant prices may be justifiable if the meals are top of the range but this is barely true; most of the menu items are simple and do not warrant such prices. The drinks have been called tasteless, watered down and ordinary, yet tourists patronize the area for this very reason. The food itself is inconsistent; a small number of reviewers like the salmon but most of them have nothing good to say about the menu. Some feel that their cheeseburgers taste burnt; the meat in their sand witches is grey and could be contaminated, their calamari looks like cold mush while their pizzas are soggy and wrongly done. What is worse is the response waiters give about these unsatisfactory meals; they will usually try to convince buyers to buy them anyway. In fact pawning special menu items is common and responses like “this is how we make the cheese pizza” are frequent. Several complaints have also been made about the quality of customer service. When buyers complain about overpriced food and the lack of discounts, most times servers will turn the issue around on buyers. Waiters rarely report complaints or give customers opportunities to talk to the restaurant managers. Service is relatively slow and employees are also apathetic about their jobs. Some patrons have reported negative encounters with managers who also reflect the same attitude as their waiters; to them, the restaurant is always right and the customer is more often wrong. Employees appear to have a hard time with customers’ instructions as sometimes buyers may ask for a certain pizza only to have a different one brought to them. Perhaps the biggest complaint about the customer service is the trickery involved in establishing the prices; waiters are rarely upfront about how they charge their clients. Many reverends get perturbed when told that one drink is actually two drinks, so when they order $9 drinks, what they actually end up paying is $18 (Yelp 17). This lack of transparency incenses visitors and causes them to refrain from coming back to the establishment. The most obvious opportunity for the restaurant is its pricing policy; clearly the 50% off from all menu items as well as the two drinks for one offer is what lures many buyers into the restaurant. Ironically, it is also what enrages many individuals because the organization often fails to honor its promise. The first thing it can do is maintain the discounts but actually implement them in the restaurant; being upfront about the pricing is also a crucial way for the company to rebrand itself. The organization must embrace training opportunities for its waiters and generally revamp the way it prepares it meals. Recommendations for cost control and quality improvement Colony Café is an example of what companies should not do in order to cut costs when operating in the hospitality industry. It appears that the organization is overcharging, scamming buyers and offering substandard foods in order to make savings. However, this is not the way to go if the company wants to stay in business in the next few years; if it keeps up its current trends, chances are that the rest of the country will hear about it and tourists will no longer be willing to visit them. This is especially true in the internet age where most people visit online blogs before trying out a new restaurant. Instead of going for the most obvious source of profit; that is high food prices, the company should focus on other areas of its operation that can result in cost savings. For instance, it may be located at a place that has high lease costs; rent in Miami is notoriously high but several options for moderate rent deals exist. The concerned proprietor may have selected a location that is too expensive for the budget and could actually be setting himself up for failure (Leung 115). Additionally, the business could take advantage of cheaper supplies by researching and finding reasonably-priced raw foods. It might also be encountering difficulties in controlling its inventory as several restaurants lose a lot of cash due to theft from staff. Increasing revenue often requires some investment on the part of the restaurant; is employees need to undergo training on proper customer service; management should also be included in this strategy. The organization should then commit to that aspect every day by nurturing, teaching ad building a culture of hospitality (Burton par. 14). Prices ought to be adjusted to align with the quality of service as well as the level of preparation involved as well the market prices. Since so many consumers are complaining about this issue, then Colony café needs to listen to them. No one will come back to an establishment that they think is too expensive and out of touch with their needs. The organization may also need to invest in increasing the quality and quantity of waiters and cooks as they seem to be overwhelmed by the number of customers. Conclusion Overall, the project has shown that businesses can sometimes stay in operation despite negative feedback about their service offerings. This could be because of the location, clever marketing tactics as well as the high flow of human traffic in the area. Also, the demography of the region is largely non-residential, so many of the customers are first-time buyers. The case study has shown that restaurants should not place cost savings above consumer needs, and most importantly, organizations need to look for creative ways of narrowing budgets without touching food prices. Works Cited Burton, Brooke. 10 things restaurant owners and managers can do to improve service. 23 Jun. 2014. Web. 10 Jul 2014. http://www.foodwoolf.com/2014/06/10-things-to-improve-service.html Doss, Laine. Miami Beach’s Columbus Café “worst in America” $45 Happy-hour mojito, gray meat. 15 Oct. 2013. Web. http://blogs.miaminewtimes.com/shortorder/2013/10/miami_beach_restaurant_named_w.php?page=2 Leung, Corrie. Culture club. Canadian Business, 79.20(2006): 115-120. Print. Yelp. Colony Café. 2014. Web. 10 Jul. 2014. http://www.yelp.com/biz/colony-cafe-miami-beach Read More