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

G. Demydyuk, H.A. Shawky, J.I. Van der Rest and J.A.A. Adriaanse

International Journal of Revenue Management, 2015, vol. 8, issue 2, 165-192

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.

Keywords: risk-adjusted performance; financial performance; restaurants; revenue management; key performance indicators; KPI; key operating indicators; stock market performance; restaurant revenue; customer traffic; restaurant prices. (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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