Business proposal for Papadeaux
Table of Contents
1. Executive Summary
Pappadeaux is a successful upscale casual restaurant concept with a loyal following. But no restaurant is immune to the highly competitive climate of the industry. Recent studies have shown the upscale casual segment losing market share to both fast and traditional casual restaurants. They also show that consumers find value in upscale casual dining by weighing the food quality and the overall experience against the relatively higher price (Technomic, Inc., 2013). We analyzed customer reviews to discern what Pappadeaux's guests are responding to in terms of value. Based on this analysis, customers respond overwhelmingly positively to food quality, and food quality is the most critical factor in their value calculation. Price is still an issue, even those delighted by food quality comment on high prices. Customer comments also suggest that portion sizes may be overly large, and that the investment in large portions is out of step with its importance to the guests. Pappadeaux may benefit from featuring new menu items with reduced portion and price. Such offerings at other restaurants have led to increased traffic, revenue, and per person average (PPA) (Jennings 2008).
2. Industry background
Casual dining has grown over the last thirty years along with tremendous growth in American's restaurant spending. Half of every food dollar in this country is spent in restaurants, which is double the spending level in the 70's (Pocket Factbook, 2013). The recession has made a competitive industry even more competitive. A recent Technomic survey on casual dining revealed a three tiered system divided into fast casual, traditional casual, and upscale casual, with consumers trading up and down between these levels based on their needs and perceptions of value. 85% of those surveyed reported visiting a fast casual restaurant in the past month, 80% had visited a traditional casual restaurant, and 40% reported
1. Executive Summary
Pappadeaux is a successful upscale casual restaurant concept with a loyal following. But no restaurant is immune to the highly competitive climate of the industry. Recent studies have shown the upscale casual segment losing market share to both fast and traditional casual restaurants. They also show that consumers find value in upscale casual dining by weighing the food quality and the overall experience against the relatively higher price (Technomic, Inc., 2013). We analyzed customer reviews to discern what Pappadeaux's guests are responding to in terms of value. Based on this analysis, customers respond overwhelmingly positively to food quality, and food quality is the most critical factor in their value calculation. Price is still an issue, even those delighted by food quality comment on high prices. Customer comments also suggest that portion sizes may be overly large, and that the investment in large portions is out of step with its importance to the guests. Pappadeaux may benefit from featuring new menu items with reduced portion and price. Such offerings at other restaurants have led to increased traffic, revenue, and per person average (PPA) (Jennings 2008).
2. Industry background
Casual dining has grown over the last thirty years along with tremendous growth in American's restaurant spending. Half of every food dollar in this country is spent in restaurants, which is double the spending level in the 70's (Pocket Factbook, 2013). The recession has made a competitive industry even more competitive. A recent Technomic survey on casual dining revealed a three tiered system divided into fast casual, traditional casual, and upscale casual, with consumers trading up and down between these levels based on their needs and perceptions of value. 85% of those surveyed reported visiting a fast casual restaurant in the past month, 80% had visited a traditional casual restaurant, and 40% reported