Causes of Decline in Sales of Chasska Urban Indian Restaurant

Causes of Decline in Sales of Chasska
urban Indian Restaurant
Executive summary
Aim of this research is to understand the causes behind the recent decline in the sales of
Chasska so that recommendations can be made for improvement in the situation. The
research uses a primary survey method for data collection and statistical procedures for data
analysis. There were 50 respondents including the customers who had not been visiting the
restaurant much in the last couple of days and months that has resulted into the decline in
revenues of the restaurant. The research first explores the literature studied already conducted
on the restaurant sales and the industry based on which some factors of sales decline or
consumer decision making were identified and used for constructing the survey
questionnaire. The report presents the results of the analysis of the data obtained from the
survey and based on the same, some recommendations have been made. These
recommendations can help the restaurant work on the problem of sales decline and recover
from it and work to enhance its customer visits.
Contents
Executive summary...............................................................................................................................1
Introduction and research problem........................................................................................................2
Literature review...................................................................................................................................3
Hotel & Restaurant Industry in Australia...........................................................................................3
Sales decline in Chasska Restaurant..................................................................................................7
Addressing the issue of Sales Decline...............................................................................................8
Research Gaps.................................................................................................................................10
Methodology.......................................................................................................................................10
Research Design..............................................................................................................................11
Data Collection................................................................................................................................11
Data Analysis..................................................................................................................................11
Ethical Considerations.....................................................................................................................11
Findings...............................................................................................................................................12
Discussion...........................................................................................................................................21

Recommendations...............................................................................................................................21
Limitations and Conclusion.................................................................................................................22
List of References................................................................................................................................23
Appendix.............................................................................................................................................24
Introduction and research problem
Decline in sales of restaurants is actually a growing trend in Australia. Several reasons that are noted
in the industry including decline in the cost of food consumption at home, higher bills of restaurants,
and budget pressures pushed by oil crash and other political issues. However, if the real reasons
behind these declining sales trends have to be understood, the customer would have to be asked who
consumes the food in these restaurants and can present insights into what is causing them to consume
less at these restaurants. Thus a research is needed to be done which could focus on a specific
restaurant facing the worse times so that the challenges that the industry is facing in Australia can be
revealed. If the causes behind sales decline can be identified then it would not just help the restaurant
that is studied but also the entire industry as they can also try to apply the recommendations to
improve their sales in the market. For the current research, a case of Indian restaurant has been
chosen.
Chasska is an Indian cuisine restaurant located in Western Australia. It provides Indian food to people
living in Australia through three branches that are located in carousal shopping center, Cockburn
shopping mall and Yangbup. The Yangbup of the company has recently faced a major decline in
sales. The problems that have caused this decline are required to be addresses. The brand currently
has 15 employees and they include six main chefs, waiters, accountant, and restaurant manager. If the
sales continue the declining trend, the restaurant would lose its foothold in the market and would not
be able to sustain. This can result into a complete failure of the branch and subsequently its closure.
The aim of this research is to explore the problem of declining sales of Chasska Urban Indian
Restaurant to find out the causes behind so that the problem of reduction in sales can be taken care of
and measures can be taken to increase the sales of the restaurant in Australia. The research would be
conducted on the restaurant, its operations and its customers to identify the causes behind the decline
in sales. To achieve this aim, following research questions have to be answered by the researcher
• What are the reasons of the decrease in sales lately in Chasska Urban Indian restaurant?
• What are the management methodologies that are needed to gain the stature of the restaurant?
• What are the marketing approaches that must be applied in order to advertise the existence of
the restaurant? (Rugg & Petre, 2011)

Considering these research questions, the research would be fulfilling following objectives:
 Explore the causes of sales decline in the Chasska Indian Restaurant
In order to achieve this objective of the research, the literature would be conducted through which the
factors would be identified causing sales decline and the same would then be tested using statistical
procedures that would be exploring the views of the customers.
 Explore the methods that can be used by the restaurant to maintain its sales
The previous literature would be explore to identify methods that restaurants are currently using for
improving their sales. Further, the results of the analysis of the survey data would be discussed to
come up with recommendations on what methods can be used by the current restaurants to increase its
sales.
 Explore various marketing strategies that can be used by the company to boost its sales
Based on the literature reviewed and the results of the data analysis, recommendations would be made
on what marketing strategies can be used by the company to attract more customers to the restaurant
and thereby increase its sales.
Literature review
In this section, the industry overview would be explored besides the specific company problems. It
would also include discussions on the theories related to marketing and restaurant industry
management that would help in identifying themes for the further research. The literature review
would explore the current trends and explorations already done on the industry and on the problem
and would identify the gaps in the research in terms of understanding the reasons for sales declines in
a restaurants. These gaps would be filled using the current research. The literature gap identified
would then be used for defining the methodology of the current research so that they can be filled
which would presented in the next section.
Hotel & Restaurant Industry in Australia
Hotel can be defined as a public establishment that welcomes visitors to take services like
accommodation and catering at a cost. However, the industry has seen some major structural
modifications across globe in past few years. Independent restaurants and fast food chains make a
large part of the industry now. Further, the services provided by the hotels have also become
customized as per the needs of visitors. They can be building their services that can vary as per
location, objective, type, grade or size.

The hotel business has some key characteristics that makes it different from other industries and they
include intangibility, variability, perishability, and inseparability. The warmth that the industry gives
to customers through taste and feel of food makes an experience which is an intangible concept.
Variability refers to the differences in the values of services with respect to their scope. Perishability
refers to the fact that the facilities that are provided by the food industries include delivery of
perishable goods. This is because the facility of the hotel or a restaurant cannot be separated from the
supplier of the food.
This channel encompasses many independent dining and function venues. The outlets are typically
independently owned and accordingly serviced by specialist fresh product and foodservice
wholesalers and distributors offering services to meet the frequency, cold-chain and specification
requirements of these retailers. Specialist meat, fruit and vegetable and seafood retailers service a
significant portion of the fresh product needs of these establishments.
Drivers of volume and value in this channel General factors • Growth in consumer preference for
casual dining reflected in the general increase in retail spending in the channel • Growth of coffee as a
focus for casual meeting and snacking occasions driving increased business into café channel •
Increasing consumer consciousness of cuisine • Improved variety of restaurant offering • Growth in
breakfast as a meal occasion • Growth in the numbers of outlets of coffee franchises and groups
Volume • Number of outlets • Seatings per night • Breadth of menu offering • Day parts, or meal and
social occasions, or events serviced Value • Average main meal price • Percentage of beverage in the
sales mix • Outlet location

Figure 1: Revenue-wise Establishments in Australia (The Intermedia Group Pty Ltd , 2017)
The number of establishments that provide dining or eating out facilities and the consumers visiting
them in Australia every day is difficult to capture. Absolute figures are difficult to gain but a research
has attempted to build a model of the industry which to some level of accuracy can give the
knowledge about the distribution. This was based on a primacy research conducted on the eating
joints in Australia. The revenue data was captured and compared for all establishments. It was found
that in June 2016, 85,284 eating outlets operated in Australia and most of these (34.5%) were the fasts
food joints followed by restaurants , café’s and then clubs. The total revenue gained by the industry
from all these joints was $45.3 billion with highest proportion (42.4%) going to fast food outlets
followed by restaurants, bars and pubs. The figures and percentage have been taken from the
Australian Hotels and Clubs Australia.
Figure 2: Cuisines/food concepts growth in %

The population of Australians in 2016 was 24 million and these Australians are used to eating out on
two to three days on an average which accounts to serving of over 2.5 billion meals each year. An
average household expenditure on eating out in Australia is $45 billion in an year. Food outlets and
restaurants is a large industry in Australia which gives these eating joints an average yearly income of
$480,000. The industry is competitive, has low cost to entry and has little regulations holding them.
However, it also faces challenges like getting and training good staff. A survey conducted on 1,009
eating joints from Australia in August 2016 revealed some major issues that these establishments
facing and these included marketing, staffing, and technology. Another survey had also taken views of
customers of these restaurants in 2017. The collective research report was prepared which presented
following findings:
o The industry faced staffing as a major problem because of lack of skills and difficulties in
managing them. It is hard to get people who have the right skills and are also committed to
delivering performance. Moreover, the industry being human resource intensive, a large
amount has to be spent by restaurants in compensating and training their staff which reduces
their margins thereby reducing the revenues. While finding human resources is one
challenging, retaining them in competitive arena is another challenge.
o Healthy food is becoming preference of most consumers and thus, instead of eating outside,
they are preferring to have their food consumed at home. Also, they look for food variety that
is more heathy to consume. Thus, traditional fast food items are facing a decline in sales as
more and more customers are looking for healthier food options. Less healthy food like steak
are on decline in sales.
o Tastes of consumers are changing and these are respondent to by the restaurants adding more
of fine dining options even in their fast food joints. Fine dining has thus become less
exclusive and thus, does not give any major competitive advantages to find dining restaurants
that are selling food at the similar range as fast food restaurants or are serving similar items.
o The pressures on the restaurants are increasing with increasing costs of operations as there are
dozens of cost heads including procurement, servicing, order management, staff management,
maintenance, rent, waste management , marketing, wage payments and so on. Because of this,
margins of restaurants are reducing
o With virtual world connecting to the physical world, many customers are making online
bookings or through phone calls which makes them explore the reviews posted online while
they take a decision to visit a restaurant. Thus, it becomes necessary for the establishment to
have not just the presence online but also good reviews posted by customers for which the
companies have to invest huge in marketing.
o More exposure and visibility is required and thus, marketing is gaining importance in the field
of restaurant. Good marketing can make a difference between the failure and success of a