Customers' Expectations and Green Index: Gold Coast Restaurants

This report presents a study on customers' perceptions and expectations of environmentally sustainable restaurants, specifically focusing on the Gold Coast in Australia. The research investigates the level of awareness regarding the environmental impacts of restaurant operations, customer willingness to pay a premium for green initiatives, and the influence of demographics such as gender, age, and income on these preferences. The study develops a 'Green Index' to gain a comprehensive understanding of customers' green attitudes. The findings reveal that although awareness of environmental impacts is moderate, a significant portion of the population is willing to pay extra for green services. The research also highlights gender differences in green tendencies, while income did not significantly affect green preferences. The study provides valuable insights into the factors that drive customer behavior and the potential for the restaurant industry to adopt sustainable practices to attract customers and improve goodwill.

Accepted Manuscript
Customers’ perceptions and expectations of environmentally sustainable
restaurant and the development of green index: The case of the Gold
Coast, Australia
Camilo Vargas Sarmiento, Ali El Hanandeh
PII: S2352-5509(18)30129-5
DOI: https://doi.org/10.1016/j.spc.2018.04.001
Reference: SPC 131
To appear in: Sustainable Production and Consumption
Received date : 26 November 2017
Revised date : 29 March 2018
Accepted date : 2 April 2018
Please cite this article as: Sarmiento C.V., El Hanandeh A., Customers’ perceptions and
expectations of environmentally sustainable restaurant and the development of green index: The
case of the Gold Coast, Australia. Sustainable Production and Consumption (2018),
https://doi.org/10.1016/j.spc.2018.04.001
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Word count: 6997
Customers’ perceptions and expectations of environmentally
sustainable restaurant and the development of green index: The
case of the Gold Coast, Australia
Camilo Vargas Sarmiento and Ali El Hanandeh*
School of Engineering and Built Environment
Griffith University, Nathan, QLD 4111, Australia
*[e-mail]

Abstract
Green awareness has created the necessity in people’s minds for purchasing eco friendly products;‐
as a result, the market responded with the offer of sustainable merchandise and operations in
different economic sectors including the food and hospitality sector. Restaurants are characterised
by their high waste production rate. Many restaurants have adapted their operations toward eco‐
friendly operations. The current study assessed customers’ expectations and attitudes toward green
restaurants in the Gold Coast, a major tourist destination. Five hypotheses revolving around the
influence of awareness, gender, age, and income were conceptualised based on studies from other
communities around the world. A survey instrument was administered. The results suggested that
although only 40% of the population are aware of the environmental impacts of restaurant
operations, 78% would be willing to pay an extra 5% on average in a green restaurant. Men
indicated that they would pay more for the green service than women (5.4% vs 4.3%). However,
more women were willing to pay an extra fee than men (89.2% vs 59%). The willingness to pay was
also positively correlated with the level of education. The youngest age group and the lowest
income bracket were more willing to pay a higher premium than other demographic groups.
Nevertheless, no significant differences were detected among the demographic groups. Contrary to
the commonly held perception, income did not have a significant effect on the green tendencies of
customers. The results also suggested that there was a gender bias in the green tendencies of the
population with women having a higher green index (GI) =3.29 than men (GI=2.66). Nearly 98% of
the respondents suggested that having environmentally sustainable practices would positively
influence their customer review. Although an opportunity exists for the restaurant industry to adopt
sustainable practices to attract new customers and to gain goodwill, they should be careful not to
treat the provision of this service as a new source of profit because the demand showed high
sensitivity to the price.
Keywords: Green restaurant; sustainable food service; environmental management; sustainable
tourism; green index

1. Introduction
Consumer behavior is more and more being influenced by environmental or ‘green’ values
influencing what people buy and the restaurants they would like to eat in (Doszhanov & Ahmad,
2015; Mohd, 2013). This new trend has created a new market with an environmental conscience and
new competitive advantages for companies who are willing to adapt these strategies to their
activities. Economic growth and the global increase in food demand have placed greater demand on
the food industry; and consequently, greater impacts on the environment. Of specific concern are
land degradation, over consumption of natural resources and greenhouse gases emissions (Garnett,‐
2013; Millward & Garnett, 2010). On the other hand, rising environmental awareness and health
concern about the safety of current food production systems have contributed to increasing number
of people considering the purchase of “eco friendly” food (Mohd, 2013). Furthermore, the search‐
for better flavours and taste are promoting the consumption of organic food with less chemical
incorporation (Kim, Njite, & Hancer, 2013; Sirieix, Kledal, & Sulitang, 2011; Yin, Wu, Du, & Chen,
2010)) . The reduction of red meat consumption, an increase of vegetable intake, cutting of high
fructose corn syrup use, and the support of local market are listed as environmentally responsible
initiatives at the consumption stage (Martinez, 2010; Hillier et al., 2009; Weber & Matthews, 2008).
The emergence of a ‘green customer’, a person who is interested in the environment is worldwide
evident. For example, in India, environmentally conscious people tend to choose green alternatives
in the hotelier sector (Manaktola & Jauhari, 2007) and in the USA, health aware people prefer green‐
restaurants, since they offer local, organic, sustainable and healthy food (Namkung & Jang, 2017). A
typical stereotype of the ‘green customer’ is that they implement green practices at home (B.
DiPietro, Cao, & Partlow, 2013), they are mid high income earners, female (Han, Hsu, Lee, & Sheu,‐
2011) and youths (Baltescu, 2017). Baltescu (2017) surveyed 264 students in Brasov; their results
showed that although only 34% were aware of the green restaurant concept, 95% consider
themselves as highly environmentally concerned. To young adults, an ecofriendly restaurant
attributes are; use of renewable energies, attention to the use of ingredients, avoiding of frying
procedures, and the use of organic ingredients ( Baltescu, 2017). In view of these results, it is
possible to draw a relation between the customers’ perception of ecofriendly restaurant and healthy
food, which is consisted with the findings of Iraldo, Tesla, Lanzini and Battaglia (2017) about the
small and medium enterprises (SME) in the food service industry.
Research pointed out that the young generation, particularly, females and high earners, have
presented a high preference to organic options (Yu, Gao, & Zeng, 2014; Mohd , 2013). They are also

more willing to pay higher prices for organic meats and products (Yu et al, 2014). On the other hand,
the older generations are more resistant to adopt new green initiatives in their diet and more
reluctant to pay an extra fee to receive green services (Yu et al, 2014). Ginsberg & Bloom (2004)
explain the attitude of the older age group by the rigid diet traditions, which make it difficult to
change their daily food habits for more eco friendly options. Nevertheless, Kwok, Huang and Hu‐
(2016) studied the support of green restaurant concept among different sociodemographic groups
through three behavioural intentions: willingness to pay more; wait longer and travel farther. Their
results confirmed difference between genders but were not conclusive among the others
demographic groups (age, income, educational level and members in the family).
In response to the emerging trend, food companies have developed green marketing strategies, an
added driver of green consumption and marketing campaigns, which intend to attract customers
concerned about the consequences of non healthy diets. This strategy has proved to be the most‐
effective marketing strategy in food marketing(Kim et al., 2013). However, of particular concern is
the approach of the food companies to green customers, which often relies on charging higher
prices and use of complex jargon. This poor understanding of customers’ needs, product shortage
and the shallow relation of managers staff and establishments customers are some of the obstacles‐ ‐
to the growth of the eco friendly food market (Iraldo et al., 2017; Perrea, Grunert, & Krystallis,‐
2015).
Eco labelling is a tool that helps to identify environmentally responsible products or services and is‐
used as a competitive strategy, and differentiation tool (Chkanikova & Lehner, 2015). The green
certification’s main goal is to assure that the product or the service achieves certain environmental
conditions. Generally, there are two broad eco labeling classes: a certification done eternally by the‐
organisation or brand owner and third party certification which involves an external agent for the‐
environmental evaluation (Teisl, Roe, & Hicks, 2002). An advantage of eco certification is that it can‐
reduce the risk of ‘greenwashing’. Greenwashing is the practice of deceptively marketing a product
or a service as being environmentally sound. The general response of the customer toward eco‐
labeling is positive, and it is related to education of potential customers, and their perception of the
reliability of the eco label that is presented (Chekima, Syed, Igau, Chekima, & Sondoh, 2016). In the‐
restaurant industry, different certifications are available; green seal certificate, green restaurants
association certification, certified green, gen green cert, and the green table network. The green
table certification is the most relevant in the Australian context. However, these certifications are
not well known to the majority of people (DiPietro et al., 2013).
Based on the literature reviewed, the following hypotheses were formulated:

• Hypothesis 1: Patrons are aware of the environmental impacts of restaurant activities.
• Hypothesis 2: Patrons are willing to pay a premium to support green initiatives of
restaurants.
• Hypothesis 3: Females are more willing to support green restaurant initiatives.
• Hypothesis 4: Support for green restaurant initiatives is higher among young people.
 Hypothesis 5: Higher income earners are more supportive of green restaurant initiatives.
The level of the customers’ response to sustainable initiatives and their final purchase decision is
marked by multiple dimensions: functional factors related to the physical characteristics of the meal
(taste, smell, consistency, for example); social factors such as the linkage formed during the
purchase action to a certain social group; hedonic factors such the emotions triggered by the
purchase action; and ethical stand including the feeling that the purchase has supported an
environmental or sustainable cause (Holbrook, 2006). These factors are highly contextual; for that
reason, businesses with green intentions should understand the profile of their customers, and find
the real necessity that the customer is trying to fulfill with the green image of their purchase.
Willingness to pay is the most popular method to gauge the green tendencies of customers;
however, this may be inadequate in complex situations where many factors may affect the customer
decision. In this study, a ‘Green Index’ was developed to take into account other factors to provide a
better understanding of customers’ green at. The hypotheses were tested on the Gold Coast
metropolitan case, a popular world tourism destination.
2. Case study
Gold Coast is located in the South east Queensland region. It is the 6‐ th largest city in Australia with a
population of 568,000. The main economic activities in the Gold Coast are tourism, construction,
and retail. The Gold Coast has strong population growth due to great weather and the attraction of a
flexible workforce. This workforce has been mainly represented by the employment of part time in‐
accommodation, retail and healthcare sectors (KPMG, 2015).
Tourism is one of the most important sectors in the Gold Coast with more than 4 million visitors and
a revenue of 731 million during 2014 (Gold Coast Tourism industry & Griffith Institute for Tourism,
2014). The solid industry performance positively affects the development of the accommodation and
the food service sectors. Approximately 500 restaurants and cafés with different ranges of flavours
and styles operate in the Gold Coast (City of Gold Coast, 2017). This sector along with the beverage
services, generated sales of $1,698 million during the 2015/2016 fiscal year; representing 2.8% of
the total sales and providing 7% of the total employment in the city (City of Gold Coast, 2016). The

suburbs with the highest density of restaurants are; Main Beach, Surfers Paradise, Broadbeach,
Labrador, and Coolangatta.
According to tourists, the main attractions of the Gold Coast are (Tourism Research Australia, 2013):
 good weather
 the range of dining options
 perfect place to spend quality time
 the warm and welcoming holiday atmosphere
Gold Coast will host the 2018 Commonwealth Games which will be a massive event. The games are
expected to attract the participation of 6,500 athletes and officials from 71 countries and nearly 1.5
million spectators. The city is getting ready to host this event and has placed great emphasis on
sustainability. Some activities like the reduction of waste, sustainable procurement of low
environmental impacts products, and the inclusion of healthy, local, seasonal and organic food are
part of this event (Queensland Government, 2017).
The aim of this study is to identify customers’ expectations of ‘Green Restaurants’ and their attitudes
towards restaurants with environmentally responsible practices in the Gold Coast in view of the 5
hypotheses formulated earlier and to develop the concept of the ‘Green index’ to measure
customer’s green tendency.
3. Methods
This study employed quantitative research methods which included hypothesis setting, survey
instrument design, pilot testing, data collection, instrument validation, data cleaning and validation,
data analysis and hypothesis testing and finally index development.
3.1. Survey design
To test the above hypotheses, a survey instrument was designed. The first section of the survey
contained questions to profile the respondents, including gender, age, education, income, and
resident status. Additionally, this section included questions about the dine out habits and type of‐
diet. The second section attempted to measure the respondents’ environmental awareness of
restaurants operations. The third section was designed to capture customers’ responses to
environmentally responsible activities by the restaurant and included a willingness to pay extra to
receive eco friendly activities and influence on their customer review of the restaurant. This‐
premium fee reflects the real perception of the people toward green actions (Namkung & Jang,

2017; Slevitch, Mathe, Karpova, & Scott Halsell, 2013; Manaktola & Jauhari, 2007).‐
The fourth section was about the sustainable activities expected by customers from an
environmentally responsible restaurant (Weller et al., 2014; DiPietro et al., 2013; Lockie, Lyons,
Lawrence, & Mummery, 2002). This section intended to clarify where the restaurant should focus
their green strategy in order to attract the ‘green customers’. The last section of the survey related
to the green marketing and ecolabels, as they are an important factor for a successful eco friendly‐
business. This section was adapted from from Doszhanov & Ahmad (2015) and Chkanikova & Lehner
(2015). A sample of the survey is included in Appendix A.
3.2. Survey validation
To ensure the integrity and validity of the survey instrument, the developed survey was subjected to
validation process as described by Collingridge (2014). The process included:
1‐ Establishing the face validity of the instrument which consisted of two stages:
a. Review of the literature to identify the general guidelines of the survey construction,
design, and the main topics that should be included in the questionnaire.
b. Review of the questionnaire for the suitability of the local characteristics. This was
achieved in consultation with two academic experts.
2‐ Pilot testing of the developed instrument. The developed instrument was administered to a random
sample (10 people) from the target population. After analysis of the results from the pilot run, the
instrument was modified by eliminating one redundant question and the re wording of another.‐
3.3. Population and sampling
The Gold Coast city has a total population of 567,644 inhabitants of which 383,830 are older than 18
years (Profile.id, 2015). The target of this study are the potential restaurant customers in the Gold
Coast including tourists as they are integral component of restaurant patrons. Under 18 year old‐ ‐
people were excluded as they are minors. Equation 1 was used to estimate the minimum sample size
to ensure a 95% confidence level and 10% margin of error.
∗
∗
Equation 1
z=z score related to the confident value=1.96‐
p=fraction of the population that is over 18 years old=67%
e=Margin of error (10%)

N=Total
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excluded to maintain the level of confidence expected. The following general cleaning was
performed on the data:
1. Eight forms were excluded because they were identical, as they were completed by same
family members or group of friends which may have influenced each other’s responses.
2. Three forms were eliminated because they have blanks (unanswered questions) and
inconsistent demographic profile.
3. All remaining forms were analysed to identify consistent patterns in the answers or bias. No
clear patterns or bias was identified and as such were deemed valid responses.
4. Non linear principal component analysis (PCA) was used to gauge the‐ effectiveness of the
instrument in measuring the latent variable of the study (i.e., the attitude of the people in the
Gold Coast towards environmentally responsible practices of restaurants).
The data analysis for the current results included: (1) General descriptive statistics – especially for
the demographic characterisation of the sample; (2) Kolmogorov Smirnov test to measure the‐
normality proper of the data; (3) Whitney and Kruskal Wallis test, to discover significant possible‐
relations among different social groups. All data analysis was carried out using SPSS™.
3.6. Green Index
To provide a summative measure of the customer attitude to the ‘green restaurant’ concept, the
Green index (GI) was developed. The GI is defined as in Equation 2:
∗ ∑ ∑ ∗ ,
Equation 2
, , n is the number of respondents. f is a
scaling factor calculated as following:
∑
The green index can assume any value between 0 and 5; where zero represents poor attitude
toward green restaurants and five means best attitude.
4. Results and Discussion
Out of the 130 valid responses, 56 were females (43.1%), which is under representative of the‐
population (48.6). The age distribution of the respondents is shown in Figure 2 (a). All age groups
were represented in the sample. Compared to the Gold Coast total population, the sample was in

general
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4.1. Dining habits
The survey found that 85% of the respondents are omnivores, followed by semi vegetarians (12%)‐
while the remaining 3% were either strictly vegetarians or vegans which is in line with the general‐
population diet preferences. Nearly two thirds of the respondents reported that they normally dine‐ ‐
out 1 2 times per‐ week. The eating out frequency observed in this study is also consistent with the‐
national average of 4.2 times per month (Ipsos Australia, 2016).
Figure 3. Restaurants preference of the respondents
Figure 3 shows the types of restaurants according to the dining out preferences of respondents.‐
Casual dining, ethnic food, and cafés are the three top choices for the customers, which are in
agreement with the national trends. The ‘Eating Out in Australia 2017’ survey conducted by ‘The
intermedia group (2017)’ exposed Australians’ preference for casual dining restaurants, the
development of healthy options restaurants mainly related to Korean and Japanese cuisine, and‐
the growth of the cafés, boosted by the redefinition of the breakfast as a dine out occasion (The
Intermedia Group Pty Ltd, 2017). These results gave further assurance of the validity of collected
data and the representativeness of the sample.
4.2. Customers’ perception and expectations of ‘Green Restaurant’
This section attempts to gauge the level of customer consciousness of the environmental issues
encouraged by the restaurants, and consequently define the concept of ‘green restaurant’ in the
industry from the customer’s perspective. Surprisingly, 60% of the respondents were unaware of
the environmental impacts of a restaurant. Only 40% of the respondents were able to identify at
least one environmental aspect of restaurant operations. Waste in general including food waste and
packaging was the main environmental aspect pointed out by respondents. Von Massow &
McAdams (2015) discussed the concept of “plate waste”. Plate waste is a term directly related to
the concept of waste in restaurants, and it is the edible food that is not consumed by the patron
43.1%
19.2%
26.9%
57.7%
13.8%
31.5%
Ethnic Fast
Food
Fast
Casual
Casual
Dinning
Fine
Dinning
Café