Costa Coffee: Issues Impacting Restaurant and Bar Subsector in UK

This report examines the restaurant and bar subsector in the UK, focusing on two key issues: hygiene and safety concerns, and increasing employee turnover rates. It analyzes these issues using the PESTLE model, exploring their political, economic, social, technological, environmental, and legal implications, particularly in the context of Costa Coffee. The report further investigates how these issues impact the sustainability of businesses within the subsector, considering factors such as customer preferences, operational costs, and brand image. It concludes with a reflection on the challenges faced during the research process and the lessons learned, emphasizing the importance of time management, multi-tasking, and research skills for effective report writing. The report highlights the critical need for restaurants to adapt to changing customer expectations, maintain high hygiene standards, and address employee retention to ensure long-term business viability. The report is available on Desklib, a platform providing AI-based study tools for students.

REPORT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Two key issues that have affected Restaurant and bars subsector...............................................1
Using PESTLE model categorise two issues identified..............................................................2
Ways in which two key issues discussed can impact sustainability of business in Restaurant
and bars subsector........................................................................................................................3
Reflection of two challenges that had to be overcome and summary of lessons learnt from
these experiences.........................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Food and beverage industry are a kind of industry that focuses upon processing,
preparing, packaging and selling food and beverage items. Restaurants and bars, is a sub sector
of this industry (Lakshmi, 2020). Nowadays due to changing lifestyle of people demand for
places like restaurants and bars is increasing continuously. In past 5 years number of restaurants
and bars in UK have increased. Costa Coffee is a British coffeehouse chain that was founded in
1971 by Bruno Costa and Sergio Costa whose main headquarter is in Dunstable, England. This
report will lay emphasis upon two key issues that have affected Restaurant and bars subsector of
UK, ways in which these issues have impacted sustainability of businesses of this sector.
MAIN BODY
Two key issues that have affected Restaurant and bars subsector
There are various kinds of factors because of which Restaurant and bars sector are facing
various kinds of issues. Some of the most common factors because of which this sector is facing
various issues are: Continuous change on current trends, advancement in technology, changing
preferences of customers and many more. Due to these factors Restaurant and bars subsector is
acing various kinds of issues because of which organizations operating in this sector are getting
impacted (Fietz and et.al., 2018). Costa Coffee is one of those organization that operates in this
sector which is a UK based coffee shop that was founded in London as a wholesale operation
supplying roasted coffee to caterers and specialist Italian coffee shops. But today they are one of
the most famous coffee shops of UK that sells products like Coffee, tea, sandwiches, sweet
snacks and iced drinks. Two main issues that are affecting this subsector as well as Costa
Coffee are: Hygiene and safety issues and increasing employee turnover rate.
Hygiene and safety issues
It is one of the most important issue which is being facing by approximately all the
organizations operating in this subsector. Nowadays people have become more health conscious
because of which they focus upon hygiene, safety and overall quality of food and beverages they
have. People are focusing more upon having food or beverages that can help them in enhancing
their overall health (Kwok and et.al., 2020). Due to this. It has become more important for
organizations in this sector to focus upon maintaining high hygiene and safety level in order to
maintain their overall customer base and attract a greater number of customers. But due to
current pandemic situation of Covid-19, people have become more conscious of their health and
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in order to maintain their overall health they only prefer having food from restaurants that
maintain high hygiene and safety level. But this pandemic situation has made it much more
difficult for restaurants to maintain high hygiene and safety level. This is majorly because due to
Coronavirus situation, rules, legislation and regulations for organizations in this subsector have
increased. They need to maintain social distancing, provide various kinds of safety hears for
safety (Gizaw, 2019). This hygiene and safety issue has impacted most of the organizations in
this sector because of this issue, most of the people do not prefer to have food and beverages
outside in restaurants due to fear of lower hygiene and safety parameters.
Increasing employee turnover rate
Another issue which is being faced by organizations of Restaurant and bars subsector is
increasing employee turnover rate. Employee turnover is one of the most common issue which is
faced by approximately all the organizations of this sector. This is majorly because wages, perks
provided to employees working in this organizations of this sector are lower. Organizations like
Costa Coffee only provide salaries to their employees. This increasing employee turnover rate is
impacting overall business of organizations. According to previous research done in this area, it
has been analysed that out over 10 employees every 7th employee leaves or regions from their job
in restaurants (DiPietro and Bufquin, 2018). This issue is impacting organizations in this sector
because when an employee leaves a firm it cost them both money and time that thy have invested
on training and hiring employees. According to various statistics, it has also been analysed that
employee turnover rate in this sector has reached to up to 150 percent. This increases overall
operational cost of the restaurants and reduced overall profitability. Operational cost is increased
because they need to hire new employees, train them so that they can provide high quality food
and beverages to the customers.
Using PESTLE model categorise two issues identified
Hygiene and safety issues and increasing employee turnover rate issues are impacting
restaurant like Costa Coffee operating in UK in many different ways. In order to discuss and
categorise both the issues, PESTLE analysis model can be used. It is a framework that can help
in discussing and categorising both the issues on the basis of six main factors that are political,
economic, social, technological, environmental and legal factors.
 Political factor: hygiene and safety issue can be categorised under political factor. In order to
maintain hygiene and safety government have developed various kinds of legislations in
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order to maintain a certain level of hygiene and safety. Especially due to current Covid-19
situation, government have made it compulsory for restaurants to make their employees wear
all kinds of important gears, use sanitizers in order to maintain high level of hygiene and
safety factor (Jang and Kandampully, 2018).
 Economic factor: higher turnover rate of restaurants impacts overall brand image of
restaurants. Many times, due to this rate customers of restaurants interpreted that such coffee
shops or restaurants do not focus upon other important factor because of which their brand
image is impacted. This can lower disposable income spent by customers because of which
their expenditure cost can increase and their revenue can decrease.
 Social factor: changing customers taste and preference has increased focus of employees
towards hygiene and safety factor because of which it has become important for restaurants
to enhance their quality standards (Smith, 2018). Other than this due to increasing awareness
about minimum wages act, employment benefits or perks that are required to be provided to
employees etc. employees are focusing more upon additional employment benefits they
should get. As a result, Coffee shops like Costa Coffee are facing high employment turnover
rate.
 Technological factor: high employment turnover rate can be directly categorised into this
category as today employee prefer working in firms that are technologically advance or
where manual work required to be done is less. Especially in Coffee shops like Costa Coffee,
they need to adopt advance technologies like coffee maker, brewer etc. Customer order and
table management. Lack of these advance technologies can increase turnover rate of
employees.
 Environmental factor: restrictions on added food additives has forced Costa Coffee like
organizations to focus upon ways though which they can enhance overall quality of
beverages and food items served by them and maintain high level of hygiene and safety.
 Legal factor: There are various kinds of legislations that are required to be adhered by Coffee
shops like minimum wages act, heath and safety act, waste management, restricted use of
additives and preservatives, minimum. wages etc. Not adhering these acts can increase
Hygiene and safety issues and increasing employee turnover rate issues for them (Kim, Kim
and Jun, 2020).
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Ways in which two key issues discussed can impact sustainability of business in Restaurant and
bars subsector
Hygiene and safety issues can impact sustainability of Costa Coffee business
Today due to changing preference and perspective of customers it has become important
for organizations in this sector to maintain their Hygiene and safety level. This factor can impact
overall sustainability level of business organizations because it is one of the most important
attributes which is required by customers (La Salle, 2018). Hygiene and safety level of Coffee
shop can impact purchase decision making of customers. By sourcing and using organic and
healthy ingredients organizations in this sector can maintain hygiene and safety level and reduce
environment impact on business. In order to attract such customers Costa Coffee, need to focus
upon development of sustainable policies in they can focus upon lowering their waste
production, reducing additives, increasing using organic food products etc. It is a positive impact
of sustainability that can not only help organization in this sector to resolve this issue but it also
has a negative impact upon business (La Salle, 2018). Health benefits of coffee are unclear and
not focusing upon using healthy and organic ingredients can impact health of consumers because
of which customers satisfaction level can be impacted as a result it can make it difficult for firm
to sustain within the market in which they operate.
Increasing employee turnover rate can impact sustainability of Costa Coffee business
Sustainability of business and employee turnover issue are inter-related to each other. In
order to keep employee motivated and loyal towards firm it is important for organizations like
Costa Coffee to focus upon right proportion of sustainability and turnover. If a Coffee shop has
high sustainability level, had adopted different kinds of sustainability practises waste reduction,
implementing renewable energy system can positively motivate employees to work and retain
within such organization as it helps an organization in development of positive brand image and
can help in increasing their business. In positive growth and development of business can help in
increasing employee retention level (La Salle, 2018). But increasing employee retention rate can
impact sustainability of business in a negative manner as well. This is because in order to reduce
operational cost due to high turnover rate organizations saving can reduce and cost or
expenditure can increase because of their sustainability can get impacted in a negative manner.
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Reflection of two challenges that had to be overcome and summary of lessons learnt from these
experiences
While preparing this report, there were many challenges that were faced by me. But two
most important challenges that were faced by me. First challenge was search appropriate data for
identifying two most important issues faced by restaurants and bars subsector organizations and
ways in which those issues had impacted overall sustainability of those organization. There were
a smaller number of data available that can provide appropriate level and amount of secondary
information that can be used to answer above task in an appropriate manner. In order to
overcome this challenge, I had focused upon collecting and analysing research papers and
articles so that I can identify issues that impact this industry and business of organizations
operating in this sector. Another challenge faced by me was time constraint within which this
report was required to be completed. I order to overcome this challenge; I had focused upon
development of a schedule so that I can manage all my work and compete this report on time.
Lessons that I have learnt from this experience is that, in order to complete a task in a
time, effective and appropriate manner, there are various skills that are important to be learnt and
used. Three most important skills that are required are time management for completing given or
allotted task on time, multi- tasking for completing more than one task or job simultaneously and
appropriately. Last is research skills, it is an important skill because it can help in collecting
important and required data or information that can be used to understanding a task in a proper
manner. Research skills helps us in collecting required data from different sources within a given
time period.
CONCLUSION
From the above report it has been summarized that there are various kinds of factors that
are required to be focused upon by restaurants, bars and coffee shops to be focused upon like
health, hygiene, safety, employment bonus, motivating employees and many more. Focusing
upon these factors can help coffee shops in resolving issues that can impact their firm and
sustainability of business. It has also been summarized that for restaurant and bar subsector it is
important to focus upon hygiene and safety issue because it is an important factor which is being
focused upon by organizations. This factor can not only help organization in enhancing
satisfaction level of their customers but can also help in achieving sustainability.
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REFERENCES
Books and Journals
DiPietro, R. and Bufquin, D., 2018. Effects of work status congruence and perceived
management concern for employees on turnover intentions in a fast casual restaurant
chain. Journal of Human Resources in Hospitality & Tourism. 17(1). pp.38-59.
Fietz, A., and et.al., 2018. Compliance with Food Safety Laws in Germany: Food Businesses in
Berlin. Law & Policy. 40(3). pp.267-285.
Gizaw, Z., 2019. Public health risks related to food safety issues in the food market: A
systematic literature review. Environmental health and preventive medicine. 24(1). p.68.
Jang, J. and Kandampully, J., 2018. Reducing employee turnover intention through servant
leadership in the restaurant context: A mediation study of affective organizational
commitment. International Journal of Hospitality & Tourism Administration. 19(2).
pp.125-141.
Kim, K., Kim, M.J. and Jun, J.K., 2020. Small Queuing Restaurant Sustainable Revenue
Management. Sustainability. 12(8). p.3477.
Kwok, R., and et.al., 2020. Current Challenges of Cold Brew Coffee—Roasting, Extraction,
Flavor Profile, Contamination, and Food Safety. Challenges. 11(2). p.26.
La Salle, D.J., 2018. Strategies For-Profit Educational Leaders Use to Reduce Employee
Turnover and Maintain Sustainability.
Lakshmi, B.M., 2020. Impact of COVID 19 on the Restaurants.
Smith, J.D., 2018. Successful Strategies for Reducing Employee Turnover in the Restaurant
Industry.
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