Food and Beverage Management: The Duck and Drake Restaurant - Case Study Example

The Duck and Drake Restaurant is an owner operated establishment that has been in existence for two years. With annual revenues of approximately Ƚ 400 000 the owners view their first two years as successful (see Table #1.). However, their success does not preclude the opportunity for greater efficiency and professionalism that would further increase sales and improve profit margins. Simply put, the restaurant is not performing as well as it could or should. Areas where improvement is possible have been highlighted recently by the observations of a new employee whose interactions with customers have highlighted a series of customer complaints and concerns: Issues that may be undermining the restaurant's sales, damaging the image that the restaurant is presenting to the public and reducing profits. The restaurant's current situation is detailed in the following chart Table #1. Duck and Drake Financials: Sales, Expenses and Profits Product Category Annual Sales/Revenues Annual Costs Annual Profits Beverages Ƚ 240 000 Ƚ 115 000 Ƚ 125 000 Food Ƚ 120 000 Ƚ 54 000 Ƚ 66 000 Gaming (pool and sot machines) Ƚ 40 000 Not applicable Ƚ 40 000 Total Ƚ 400 000 Ƚ 169 000 Ƚ 231 000 The customer complaints that have recently come to light are delineated below: We don’t come here as often as we would like because it is hard to know what’s still going to be available on the menu. I like to have a steak when I am out but I don’t have them here anymore, they are so unreliable. I hope the wine I have ordered is not that supermarket wine I had last time, it had their brand on the label and was four times the price. Well I haven’t been here since Christmas; I wasn’t very well after that turkey dinner. Three of these four complaints relate to consistency. “We don’t come here as often as we would like because it is hard to know what’s still going to be available on the menu,” indicates that menu items are not consistently available and that customers are often told their meal choice is temporarily unavailable. This comment indicates inconsistency in terms of availability and supply. Customer comments such as, “I like to have a steak when I am out but I don’t have them here anymore, they are so unreliable,” indicate that the quality of the product is inconsistent. Sometimes the steak may be very good but the quality of the beef available, at other times, has failed to live up to customer expectations. The final customer comment, “ I wasn’t very well after that turkey dinner,” seems to indicate that the quality of the food served is so inconsistent that it may present a health and safety issue to diners. Even if this is not factually true, the perception that quality is that big of a problem may be enough to drive away customers. Finally, customers have expressed concern about the quality of the wine served and its price. Specifically, complaining that it is supermarket 'plonk' that has been relabeled and then sold for an exorbitant price. This is not a complaint relating directly to consistency but can be seen as related to both fairness and quality. Overall, these customer complaints could be described simply as a lack of professionalism on the part of the owners. This lack of professionalism is epitomized by one short clause in the case that indicates the owners rely on the restaurant to feed themselves and, perhaps, their family and friends: The owners “have lived well off the business including most of their own food and beverage requirements.” This is a horribly unprofessional way to look at the inventory in a restaurant that one purports to be operating as a business. These complaints in general, and particularly this last comment, seem to imply that the owners have a great deal of experience in the industry (perhaps having worked their way up through the ranks) and have a visceral or experiential understanding of the hospitality industry. However, they seem to be equally unversed in management skills. This perception is reinforced by the comment in the case that they rely on a single annual chat with their accountant. Overall, the Duck and Drake Restaurant has some strengths. Its owners are evidently experienced in the food and beverage industry and have an intuitive understanding of the business. Also, the restaurant has substantial sales and considerable cash flow. On the other hand, it is so poorly managed that inventory control and inventory consistency are not being handled properly and maintenance of a healthy environment for diners may be being compromised. Inconsistency and a lack of professionalism are the greatest weaknesses evident in this case. Ultimately, in the food and beverage industry an establishment lives and dies by its reputation. The lack of professionalism of the owners of the Duck and Drake is threatening its reputation. It can be inferred from the case that the restaurant is beginning to develop a reputation for unpredictability and inconsistency. This inconsistency, whether it is real or merely a perception, and in this case it would seem to be real, is the biggest threat facing the owner-operators of the Duck and Drake Restaurant. In broadest terms the management of the Duck and Drake need to become more professional. They need to develop systems that ensure their product is consistent and consistently good. They need to focus more on the logistics of their operation. This will allow them to keep menu items in stock, ensure customer health and safety and, ultimately, ensure that the product they offer is consistently good. Stricter inventory control and consistent quality will protect their reputation, increase their sales and improve their profit margins. Overall, they need to accept that although they are intimately familiar with the food and beverage industry their knowledge of sound management practices is severely limited and can only be enhanced by increasing reliance on outside assistance. Working with their suppliers and their accountant they must develop a more accurate and more flexible way of maintaining inventory. Ideally, they should only very rarely have to say that a menu item is unavailable. Achieving this goal demands a better understanding of their sales patterns. A more accurate awareness of their sales patterns would also allow them to ensure that they do not have too much of a given item in stock to see it consumed in a timely, healthy and safe manner. They must act to never run out of a menu item but also to never have so much of an item in stock at any given time that it can spoil and make a customer ill or need to be disposed of. Careful control of inventory will also improve their margins and profitability. Of lesser importance, but very significant, is limits they must place on their own behaviour. The kitchen at the Duck and Drake is a restaurant kitchen in a professional establishment. It is not their own private fiefdom of food: The owners' practice of helping themselves to foodstuffs needs to be curtailed. It is very unprofessional, makes accurate inventory control difficult and may actually encourage employees to steal or pilfer when they see their employers and the establishment's owners treating the restaurants inventory as their own private stock. All of these measures will enhance food quality and food safety. They will create a situation in which the Duck and Drake develops a reputation for consistency rather than inconsistency. The key will be the development of professional policies and procedures and reliance on outside experts, be they accountants or suppliers. In the same vein, employee training in food safety, training that may require outside experts be employed must be enhanced. The customer questions about the wine list, specifically that the wines are of poor quality and overpriced, need to be addressed. One possibility may be to bring in a sommelier or wine steward to oversee the introduction of a new wine list and train staff to serve it properly. All of these measures will enhance the Duck and Drake's reputation for consistent quality and, subsequently, increase customer traffic and sales. They will also improve profit margins. Adaptation of this package of reforms will increase revenue and improve margins: In turn, both of these developments will make an already healthy (if imperfect) operation more profitable. Read More