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Key operating indicators to lever financial performance of publicly traded restaurant companies: a market's perspective from 2007-2011

Author

Listed:
  • G. Demydyuk
  • H.A. Shawky
  • J.I. Van der Rest
  • J.A.A. Adriaanse

Abstract

This paper develops a market perspective on revenue management by directly linking risk-adjusted market performance of publicly traded restaurants to their revenue and activity-based operating indicators. The results show that higher customer traffic generated by a lower average customer check is a potential business model that leads to superior long-term risk-adjusted stock market performance. Operating profit per guest is also identified as a strong predictor of superior financial and stock market performance. The study contributes to a growing literature in restaurant revenue management that investigates the price-traffic relationship and its influence on financial performance in a multiunit restaurant context. Customer traffic is thereby identified as a key positive revenue and profit driver that is negatively impacted by a higher average guest check. The findings were consistent over all restaurant types (franchised/owned, full-service/quick-service, cuisine) as well as during the years of better and worse state of the economy.

Suggested Citation

  • G. Demydyuk & H.A. Shawky & J.I. Van der Rest & J.A.A. Adriaanse, 2015. "Key operating indicators to lever financial performance of publicly traded restaurant companies: a market's perspective from 2007-2011," International Journal of Revenue Management, Inderscience Enterprises Ltd, vol. 8(2), pages 165-192.
    • Handle: RePEc:ids:ijrevm:v:8:y:2015:i:2:p:165-192
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    Citations

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    Cited by:

    1. Ganna V Demydyuk & Mats Carlbäck, 2024. "Balancing short-term gains and long-term success in lodging: The role of customer satisfaction and price in hotel profitability model," Tourism Economics, , vol. 30(4), pages 844-875, June.
    2. Kukanja Marko & Planinc Tanja, 2019. "Cost-Effective Service Excellence: Exploring the Relationships Among Restaurants’ Operational Efficiency, Size and Service Quality," South East European Journal of Economics and Business, Sciendo, vol. 14(2), pages 67-81, December.

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