The manager of a licensed Italian, a la carte restaurant is concerned that her restaurant is very quiet during the mid-week period. She feels that the major resistance to eating out in the middle of the week is the relatively high selling price. The Revenue Reports indicate the current average food spend to be $34.15 and the average beverage spend to be $16.80. The Monthly Food Reports show the actual food cost to be 28%. The manager realises that reducing the menu price will cut the contribution margin per unit of food. However, she reasons that there will be drink sales and the opportunity to expand her clientele base which might result in return sales at the week-end. She decides to introduce an “all you can eat” buffet concept on Monday, Tuesday and Wednesday evenings at $ 27.90 per person, with children at $ 13.50 each.

Discuss what her strategy of “all you can eat” will do to the “Food Average Spend” statistics for the week and also the likely effect on the restaurant’s food cost percentage,

Discuss the key information to be monitored over the next few weeks to measure the results of this strategy. This will include:The different contribution margins (buffet vs. a la carte)

The effect on the labour cost
The amount of food prepared daily for the buffet and how to deal wit carry overs and waste,

The overall effect on the food cost and therefore profitability,
Critically analyse how you would have investigated the problem and what strategies you would have implemented to improve the overall profitability of the restaurant.

As per the Criteria Sheet a minimum of 6 in-text references should be included – A minimum of 4 references using the FBM prescribed text book.