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Key operating indicators to lever financial performance of publicly traded restaurant companies: a market's perspective from 2007-2011
by G. Demydyuk; H.A. Shawky; J.I. Van der Rest; J.A.A. Adriaanse
International Journal of Revenue Management (IJRM), Vol. 8, No. 2, 2015
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.
Online publication date: Sun, 21-Jun-2015
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