Projects
Introduction:
Embarking on one of the most captivating projects of my life, my friend and I decided to open a Pizzeria in Burnley, Lancashire. Despite facing financial constraints, our entrepreneurial spirit and abundance of innovative ideas fuelled our determination. Initially discouraged by the existing well-established pizzerias in town, even receiving warnings from our bank manager and local planning officers about market saturation, we decided to go ahead. We really felt that we could offer something that Burnley would love.
Undeterred, we took a bold step, quitting our jobs and securing a £20,000 loan to materialize our dream. This venture, stands as a testament that in a seemingly saturated market, there is always room for a new business with fresh, fair and quality offerings.
The narrative unfolds in various sections, each highlighting a different aspect of our business journey.
Beginning with the practicalities, our limited funds led us to a modest, vacant shop on the outskirts of the town centre. Situated in a street with numerous vacant premises and a handful of quirky establishments, the rent was affordable. Despite its less central location, it proved advantageous for our delivery-centric approach, effectively covering the entire town within a 2-mile radius!!!
Kitchen Set-Up:
Commencing with our compact premises, we managed to design the kitchen in an efficient, open-plan style, that proved to be extremely advantageous. A The mantra was clear: a small kitchen could thrive if paired with a focused, high-quality menu.
Our arsenal comprised a substantial investment into high quality core equipment: A 28-inch-wide belt conveyor Lincoln impinger oven, a solid and reliable dough mixer, and a petite 4-hub domestic gas burner with an accompanying conventional oven. This judicious selection of equipment embodied a “just enough” philosophy.
The kitchen was rounded out by two standing fridges (one for dough and the other for cheeses and toppings), a chest freezer, a pizza prep fridge table, a stainless steel worktop, and a glass door fridge for beverages. Costco shelving units in the center served dual purposes, housing pizza bags on top and storing essentials like flour, pizza sauce, and various toppings below.
Adjacent to the pizza prep fridge, an under-counter fridge stored fresh ingredients for salads, while a small chest freezer, stationed next to the stove top unit, held side orders like chicken wings. The front of the shop featured a counter equipped with two computers, tills, and receipt printers. A meticulously planned extraction system, complete with a gas interlock and gas pipes for the oven, amounted to a 6k investment.
Later, a smaller 18-inch Lincoln impinger joined the kitchen’s repertoire. Upstairs, storage for pizza boxes and beverages was complemented by the addition of a modest toilet. In summary, the entire setup, totalling 30k, was financed through a 20k bank loan and our pooled savings.
Marketing Dimension:
From the outset, our approach in Burnley was a deliberately focused strategy relying on following: differentiation marketing; a commitment to offering premium quality, superior service, and unwavering consistency. The strategy was clear: concentrate efforts on pizzas and a few sides, specializing in creating everything from scratch, from toppings to sides.
Our differentiation extended to prompt delivery times of 20-30 minutes, with monitored drivers, ensuring swift responses to customer inquiries and orders!
Thorough control over food freshness, warm deliveries, double-bagged orders, cold cans of pop, and neatly dressed drivers enhanced our customer care, providing a competitive advantage.
Innovation was another pillar. We pioneered the use of credit card readers at the doorstep and introduced computerized order taking and printing, creating a local novelty with customer databases and saved preferences.
Another key innovation was our operations and process design, creating an efficient in-shop assembly line for quick circuit order processing. We introduced the 18-inch pizza, a town first, paired with stuffed crust for added novelty and curiosity.
Our marketing material, including leaflets, was designed with crisp clarity in plain English. Real ingredients, such as good ham, quality pepperoni, top-notch tomato sauce, and premium mozzarella, reinforced our commitment to quality.
The shop front, crafted with real oak and a sleek sign with three-dimensional letters, presented a quirky yet impressive façade.
Bright, uniform lighting around the counter and shop floor showcased a clean, well-lit kitchen, reinforcing our “philosophy of transparent approach”.
Delivery drivers were incentivized with higher wages and tips, promoting speed and efficiency.
In summary, our marketing embodied a fresh, crisp, sleek concept, characterized by a relentless focus on quality, speed, novelty and transparency and dialogue with our customers
Operations:
Our journey commenced at a small scales with just two of us:—one in the shop, the other handling leafleting and deliveries.
As demand grew, we strategically expanded with part-time delivery drivers. Operating efficiently, our tiny shop minimized overheads, maintenance, and cleaning costs, paving the way for organic growth.
The shop floor was ingeniously set up, forming an 8-meter anticlockwise circle— a conveyor belt for orders, from taking to boxing. Size proved pivotal; our compact space facilitated seamless operations, emphasizing the importance of size in launching food establishments.!!!
Later on when it was all blossoming, the conveyor circle’s weakest link became the oven, necessitating adjustments in time and temperature. Also, a new, smaller oven, 18 inches wide, alleviated bottlenecks, running concurrently during busy periods and replacing the large oven during quiet times, optimizing energy use and quicker warm-ups.
Making fresh dough daily with quality flour was a cornerstone, costing a mere £9 for a 16 kg bag from Bradshaw Millers’ brand Orion. Pre-panning pizza bases into deep pans streamlined operations, ensuring pizzas were made in less than a minute ready to go in oven.
Avoiding far orders initially, we gradually expanded our delivery radius, focusing operations within a strategically defined geographical area for enhanced efficiency.
As our reputation grew, word of mouth led to requests from neighbouring towns like Nelson and Colne. Suppliers played a crucial role; frequent trips to Manchester’s Costco and reliance on local butchers the Pasture Farms for meat ensured consistency and quality. Costco and JJ proved to be reliable sources for high-quality produce, complementing the fresh salad and vegetables sourced daily from local supermarkets.
However, sourcing local packaging, especially 18-inch pizza boxes, posed a challenge. A London supplier became our solution, though bulk buying became necessary to facilitate deliveries.
In essence, our operational strategies, from efficient shop layout to sourcing quality ingredients and strategic expansion, exemplified a commitment to excellence, flexibility, and resource focus.
Financial Performance:
In the initial weeks, our revenue started at around £300 per week, swiftly escalating to a remarkable £2000 weekly after just four months—hitting the magic break-even number. This rapid achievement, coupled with our novel quality of service and a fair, tidy concept, resonated well with customers, fostering strong loyalty and word-of-mouth advertising.
Advertising and promotions were minimal due to the evident approval of our business formula by the local community. Calculations indicated an impressive spend of £600-800 per year per customer, underscoring the importance of customer care. Breaking even shortly after opening was facilitated by our minimal running costs and overheads, thanks to the benefits of a small physical business premises.
The absence of a significant wage bill in the early weeks, given our tandem work and a supportive partnership, added to our financial advantage. Zero business rates and a fixed, modest rent of £100 per week for five years further contributed to our profitability, allowing us to remain under the VAT threshold for an extended period.
Overall, the business exhibited favourable aspects from the outset, combining low costs, strong profitability, and positive market reception.
Conclusion:
This project in Burnley, from envisioning an artisanal pizza venture to establishing a thriving pizzeria unfolded as a testament to resilience and innovation. Overcoming initial scepticism and warnings of market saturation, we not only secured a £20,000 loan but also turned a modest £300 weekly revenue into an impressive £2000 within four months.
Our strategic focus on differentiation marketing, efficient kitchen set-up, and streamlined operations in a compact space allowed for organic growth and rapid break-even. Marketing innovations, including prompt delivery times, credit card readers, and a pioneering 18-inch pizza, created a distinct brand image. Operationally, we maximized efficiency with an in-shop assembly line and agile responses to customer demands.
Financially, our low overheads, minimal wage bills, and strategic supplier partnerships ensured sustained profitability. The culmination of these efforts not only secured customer loyalty but also established our pizzeria as a local success story, proving that a well-executed concept, commitment to quality, and operational efficiency can carve a niche even in competitive markets.
Pronto Pizzeria Scotland Road
Introduction:
From a research point of view the key aspect of this project lies in its illustration of business expansion through the establishment of a sister branch.
Situated approximately 4 miles from the original enterprise in Burnley, Lancashire, this pizzeria restaurant marks the second branch in a neighboring town. The dynamics of business development in such a scenario differ significantly from starting a new venture from scratch. Key distinctions include a reduced pressure to innovate, as the proven business model serves as a foundation with reliable time-tested products, services, systems, and templates readily available.
Moreover, the financial function benefits from the established parent company, which can act as a financial stronghold for the daughter branch. Access to funds, either through internal resources or cost-effective borrowing, alleviates the challenges typically associated with launching a new business. Additionally, the expansion facilitates lower Costs of Goods Sold (COGS) through bulk purchasing and collaborative negotiations with suppliers for services such as energy and marketing, achieving favourable economies of scale.
Furthermore, the ease of staff allocation from the mother branch to the daughter branch ensures a swift and reliable workforce. In essence, expanding a business through the creation of a sister company or branch proves to be a more favorable and lower-risk experience compared to implementing a completely new business idea or concept.
Why we opened new branch?
The decision to open a new branch stemmed from the evident success of our business formula and perfected system. As our business flourished, we observed a growing customer base extending beyond our initial service radius, with people traveling from farther areas to sample our food. This increased demand signalled an opportunity for expansion without incurring significant risks, as positive word-of-mouth continued to spread.
Moreover, the limitations of our small premises in Burnley became apparent as our business evolved, hindering our ability to accommodate existing customers adequately. The need for a larger capacity was undeniable. Simultaneously, accumulated funds allowed for reinvestment at minimal financial costs.
Addressing the aspirations of our workforce further justified the decision. Over the preceding three years, we had trained a motivated staff eager to work more hours and climb the professional ladder with higher remuneration. Opening a new branch not only met customer demands but also provided growth opportunities for our dedicated team.
Location:
The selected location for our new branch is the town of Nelson in Lancashire, positioned just 4 miles from Burnley. Despite being smaller than some surrounding towns in East Lancashire, Nelson emerged as the ideal choice. Nestled in the centre of the Borough of Pendle, it lies between the towns of Brierfield and Colne, along with several picturesque rural villages. While Pendle’s population is slightly smaller than that of Burnley, Nelson’s proximity to our original branch made it a strategically sound choice from a logistical standpoint.
The central location allows for seamless resource movement between the branches, enhancing operational efficiency. This geographical advantage not only places Nelson at the heart of the Borough of Pendle but also positions it in close proximity to our established branch, contributing to the overall coherence of our business operations.
The Premisses:
The newly acquired premises, strategically situated in the town centre of Nelson, offered an ideal location for comprehensive coverage of the Borough of Pendle. Significantly, the shopfloor area was twice the size of our Burnley branch, providing essential space for expanding our production and storage capabilities. This expansion also was aimed to address the shopfloor space limitations experienced in the larger Burnley branch.
Within these new premises, our operations were streamlined through an organized circular conveyor system. Orders, whether placed by phone, followed a seamless anti-clockwise route from one station to another, culminating at the dispatch table. Here, meticulous packaging into hot bags was carried out, with the completed orders then placed on an order dispatch rack for our delivery drivers to efficiently transport to customers. This innovative system enhanced the overall efficiency and functionality of our operations in the new location.
Marketing:
The most significant revelation during this business expansion was the impact on our marketing efforts. Initially, we expected both branches to perform similarly, given identical business models, marketing, and management policies, albeit with slight variations in the boroughs’ population sizes. However, our experience highlighted subtle differences in local market characteristics and compositions.
Burnley customers embraced our service swiftly, while Pendle customers took longer to warm up, exhibiting distinctions in order sizes and geographical distribution. In Burnley, orders mainly originated within a 2-mile radius, averaging £15, whereas Pendle saw orders from farther regions with higher average values around £23.
An additional marketing insight emerged: centralized marketing yields more and higher-quality materials at lower costs than bespoke local marketing tactics. Its because the costs of hiring professionals are shared among branches, rather than allocated to a single branch.
Operational Efficiency:
The collaboration between branches yielded unexpected synergy, significantly benefiting the mother enterprise, the Burnley branch. Economies of scale positively impacted both branches, particularly enhancing the efficiency and profitability of the Burnley branch. Substantial reductions in overall costs per unit of output were achieved through bulk buying, strengthened negotiations with suppliers, and more efficient staff utilization. The new branch, with its additional physical space, facilitated improvements in cooking, stock management, and storage, relieving the mother branch of operational burdens and allowing a concentrated focus on increasing sales and profitability.
Operational disadvantages:
However, expanding horizontally brought forth some challenges. Initially, there was a slight drop in sales at the original branch, indicating a potential “cannibalism” effect as customers in the overlapping areas shifted their orders to the daughter branch.
Operational and accounting issues arose, particularly in attributing costs from wholesale or bulk buying. Challenges in allocating COGS, energy costs, and labour costs between the branches surfaced, impacting accuracy.
The centralized marketing approach, while efficient, proved to be a disadvantage for the daughter branch’s initial performance. A separate marketing mix could have been beneficial, allowing for tailored introductory prices and sales offers aligned with the new branch’s market.
In hindsight, addressing these challenges proactively could have enhanced the overall effectiveness of our business expansion. Despite the hurdles, the experience has provided valuable lessons, emphasizing the importance of adaptability and a nuanced approach to marketing and operations in the context of expanding a business horizontally.
Conclusion:
The success of this project can be attributed to various factors, including the provision of incentives and facilitation of job promotions and improved pay for existing staff. The relentless focus on customer service, positioned at the core of our business model, played a pivotal role too. Our seamless management of order taking, production, and delivery aimed to eliminate waste, inaccuracy, and mistakes, emphasizing our commitment to core competence, once more proved to be vital.
However, a notable challenge emerged in the form of inherent inflexibility stemming from a joint, centralised marketing strategy. An important lesson we have learned and recognized have been the importance of tailoring policies to each location based on the varying demographics and population characteristics, even in close proximity areas.
Potential issues like sales cannibalism and cost allocations between branches, while present, proved to have minimal overall impact.
The key takeaway from our experience is the ease and efficiency of horizontally expanding a successful food service business. By projecting the full identity of the parent branch onto the new one, leveraging existing successful systems and templates, the expansion process becomes low-risk and cost-efficient. This underscores the viability of replicating a proven model to achieve growth, offering a valuable lesson for future endeavors.
The Loom Makers Bistro
Introduction:
From its inception, this restaurant project was driven by passion, not profits. It was a venture of the heart involving our family. Here the focus was on creating a space that reflected our vision and philosophy—carefully designed, offering specific cuisine, and not setting specific financial expectations.
The core philosophy revolved around honest, hearty, and real food. We aimed to serve dishes that mirrored the warmth of home-cooked meals—unpretentious, genuine, and comforting. The ambiance was meant to be welcoming and snug, a place where one could relax with a glass of good wine and enjoy a homely dining experience, akin to cooking for close friends or family.
However, some challenges emerged, primarily stemming from the unique and quirky nature of the building, especially the perplexing roof design. over its long life line the structure had undergone various transformations—from a Victorian mill to a coach spraying garage, a car repair garage, and a warehouse—before finding its latest identity as our restaurant. Despite the challenges, our fondness for the building prevailed, and its distinct character became a defining feature.
Throughout the journey, our commitment to authenticity remained unwavering. With family members as key contributors, we navigated the quirks of the building, creating memorable evenings and parties that will be cherished for a lifetime. The transformation from a multifaceted historical structure to a thriving restaurant exemplifies the fusion of passion and dedication.
The Concept:
From the outset, our vision was clear—to create a dining experience shaped by the uniqueness exuded by the building itself. This commitment to distinctiveness extended to every facet, from the menu to the ambiance.
The menu, born out of a desire to serve what we love and believe our friends and family would relish, resulted in an eclectic array. French classics, iconic Italian dishes, including pizzas, and cherished British favourites formed a tapestry of flavours. The informality of the food mirrored our approach too—a blend of our favourites in an unconventional surroundings with harmony.
The ambiance complemented the concept, with shabby-chic seating and interior design creating cosy corners for intimate evenings. The open-plan layout, with a spacious floor leading to a horseshoe-shaped seating arrangement and a quirky mezzanine, catered to diverse preferences.
Intentionally niche, the design aimed at attracting a specific clientele, prioritizing comfort and intimacy over over crowdedness. Notably, the pricing strategy for drinks, especially lagers and ales, favoured quality over quantity, .
the Kitchen set-up:
The foundational elements of our kitchen, including wiring, piping, plumbing, and extraction, were entrusted to the highly reputable local company, 1st Aurora. Their impeccable workmanship ensured a seamless infrastructure. A unique feature was the special hatch designed for food service, a deliberate choice to create an aesthetically pleasing kitchen visible to customers who enjoyed engaging with the chefs.
Investing in top-tier equipment, specifically the high-calibre Blue Seal appliances, reflected our commitment to longevity and quality. However, the challenge of a low ceiling persisted, a limitation imposed by the mezzanine above. Despite this constraint, the kitchen operated as a versatile space, accommodating the diverse menu we envisioned. The layout and design were strategically chosen to align with our vision, ensuring both functionality and visual appeal.
Marketing:
Burnley, where the town centre is dominated by national retail chains, isn’t renowned for a large dining out scene. However, our marketing strategy embraced this challenge, recognizing the untapped potential of kindred spirits seeking an honest, homely dining experience.
Our niche market targeting strategy was pivotal. The focus was on those appreciating delicious food in a tranquil, unrushed atmosphere Emphasizing high-quality wines with reasonable mark-ups aimed at enticing wine enthusiasts, we envisioned not just a profit but customer satisfaction, inviting patrons to savour both exceptional wine and food.
Ambiance played a crucial role; each table, chair, and arrangement varied, promoting individuality and privacy. The choice of ales and beers followed a similar thread, introducing a revolutionary system by Carlsberg for premium, rare craft ales and beers.
Specials and themed evenings added a dynamic flair to our marketing approach. Evenings dedicated to specific cuisines or unique culinary experiences resonated with our target audience—those seeking variety, homely comfortable surroundings and consistently delicious dining experiences.
The restaurant’s design and marketing catered to individuals yearning for honest, well-cooked food in the company of family and friends. Seasonal menu changes and themed nights ensured a constant sense of anticipation, a promise that each visit held something novel.
Certain menu items, the sacred cows, became customer favorites and remained constants on the ever-evolving menu—classics like Beef Bourguignon, lasagna, cheese and onion pie, and sticky toffee pudding.
Recognizing customer desires for finger food, tapas were introduced later, with special hours dedicated to enjoying these bite-sized delights. The menu featured a rotating selection of 6-7 tapas dishes, providing variety for those opting for a different dining experience.
In essence, our marketing approach centered on fostering a community of patrons who appreciated the distinctive blend of honest cuisine, quality wine, and a dynamic dining experience, ensuring that each visit was a pleasant experience.
Financial Overview:
Our financial strategy was anchored in securing a long-term lease with low rent, extending over a decade, affording us the luxury of a measured, unhurried approach. This translated to not only low rent but also minimal rates, resulting in remarkably low overheads.
The reduced overheads not only kept our costs in check but also provided a compelling reason to avoid chasing exorbitant revenues. Despite comparing favorably to similar establishments in Burnley, we achieved break-even at the lowest conceivable revenue levels.
A significant factor bolstering our initial financial stance was the prudent management of staff costs. Family involvement allowed us to control wages, expanding our team only when escalating sales demanded additional support.
Efficiency in managing the Cost of Goods Sold (COGS) played a pivotal role. Early morning shopping expeditions led by the Head Chef ensured access to the freshest produce. This proactive approach, coupled with strategic bulk purchases during promotions, maintained our COGS significantly below industry averages for the quality we offered, yielding an impressive overall Gross Profit (GP) ranging between 70% to 75%.
Despite the backdrop of the ongoing Brexit debate, our meticulous financial planning and operational efficiency allowed us to thrive and carve a successful niche in Burnley’s dining landscape.
Conclusion:
In hindsight, the venture stands as a triumph, a testament to a robust financial framework and the unique charm instilled in our family-run establishment. The strategic long-term financial planning, coupled with the familial approach, resulted in a delightful and distinctive bistro cherished by both patrons and staff. The success of the concept, driven by its demand and acceptance, became evident.
The extraordinary combination of remarkably low overheads and adept management in minimizing Cost of Goods Sold (COGS) proved instrumental in maintaining profitability. Focused on a niche within the local dining-out market, the business flourished without the need to aggressively pursue higher sales and revenues. The key revelation lies in understanding and catering to a specific customer segment or niche, ensuring profitability through meticulous cost management. The core principle remained unwavering – adhere to the concept while continually refining service and efficiency.
After six memorable years, the business changed hands in 2020, three months into the COVID-19 lockdown. The new owners have continued the legacy, thriving in the face of challenges and ensuring the enduring success of the establishment.
Dissertation Research Title:
“”The effects of covid-19 on Burnley and Pendle (East Lancashire, United Kingdom) Restaurant and Pub food industry. The changes and the reconfiguration of the industry’s supply chain”
Introduction:
Restaurants and food pubs not only offer hot food, but more than anything an experience. A personal service a social occasion arranged within a unique atmosphere involving food, fashion, interior design, and style. A compressed piece of dream.
Nonetheless, the restaurant is still a business organisation and subject to economic laws and forces.
It’s also one of the most vulnerable industries being notoriously sensitive to macroeconomic changes. It depends hugely on the disposable income that households possess. Ironically, this part of household budget is always one of the first to be cut when the economy is in trouble.
The industry’s supply chain is very complex. It starts on the fields, farms and fisheries and finishes as a lunch or a romantic meal in a country pub in East Lancashire, or a posh restaurant in London.
In recent years, there have been many important changes, ranging from shift in consumer preferences to the revolution in the channels of the distribution
Most recently, it’s the covid-19 and the related restrictions that are paramount drivers of change for most of businesses and social activities, including the dine-out industry. This work is aiming to study these effects and changes.
Restaurant Supply Chain:
At the simplest the Restaurant supply chain management involves: Sourcing raw materials and facilitating logistics into your restaurant, storing and keeping inventory in fridge, freezers and stores. Production that involves the magic of, cooking and preparing delicious stuff. And finally satisfying customers many needs such as eating, being pampered and entertained in nice stylish cosy environments- the distribution.
Historically, restaurants have measured their profits against three core operations costs: food 30 percent), labour about 25-30 %, and occupancy around 25 %. Looking at a unit economics view of a restaurant, the business should run between 75-85% total costs. With the rest being the profit.(Ahuja, Chandra, lord, & Peens, 2021)
UK Restaurant and Pub Food Industry. The Basic Parameters
According to the Office for National Statistics, there are 28,705 Licensed and 22,970 Unlicensed restaurants in the UK (ONS, 2022).
In 2019 the economic output of the hospitality sector (food & accommodation services) in the UK was £59.3 billion. This corresponded to around 3.0% of total UK economic output. (UK Parliament, 2022). Around 97% of hospitality businesses are small or medium size enterprises , employing 1 to 49 employees (UK Parliament, 2022)
According to the same source, In March 2020, there were 2.53 million jobs in the accommodation and food service sector in the UK, representing 7.1% of total UK jobs. Its interesting that overall the industry is responsible for about 3.85% of the industry output, but for about 7.1 % of the employment, meaning that it’s a labour intensive industry.. (Hutton, Hospitality industry in UK and covid-19, 2022)
Of the 20 broad industrial sectors in the UK the workers in the accommodation and food service sector receive some of the lowest hourly pay of £8.48, compared to £10.39 on average for all workers in the UK (Hutton, Hospitality industry in UK and covid-19, 2022)
As a result the industry experiencing chronic high turnover, absenteeism and Labour shortages
Covid-19 and the Lockdowns
Covid-19 has been responsible for the largest economic crisis since the Great depression and the Second World War. It’s had and will continue to have a long lasting impact on all industries in this country for a long while.
UK gross domestic product (GDP) – a measure of total economic activity – fell by unprecedented 24% between February and April 2020, during the first national lockdown announced in late March. (Office for National Statistics, 2021)
In order to protect the population from the deadly virus UK government decided to implement a widest range of measures affecting many aspects of social life and work
The hospitality industry benefited from some significant financial support programmes by the Government. Some schemes were available to all industries ,and some offered exclusively to restaurants and pubs.
The back of House Section of Logistics
The back of house restaurant logistics Includes such activities as sourcing, inventory , production-food preparation operations.
The back of house logistics have been hit hardest by covid-19. It becomes clear from the various researches and reports that the cause of the disruption and cost rises associated with this side of restaurant operations have involved mostly the following:
- Rice in Cost of Goods Sold (CGS)
- The shortages of the ingredients, equipment and disposables
- Many unfilled food services vacancies
Burnley and Pendle
This section will look at the Lancashire boroughs of Burnley and Pendle with an aim to introduce the general parameters of the area such as population, economic profile and indexes
According to the Census 2021, first, published on 28th June 2022, the total population for the Lancashire is 1.531,200 people, living in 14 boroughs. (Lancashire county Council, 2022)
Overall, the population of the county has been rising steadily throughout the recent years. (Lancashire county Council, 2022)
Although the county has some very attractive touristy areas and coastal towns, Lancashire also home to some of the poorest boroughs in the United kingdom. For example, The median gross weekly earnings for residents (all employees) in the Lancashire was £447.10 in April 2019. This was £32.00, or 6.7%, lower than the UK figure of £479. (Lancashire county Council, 2022
Why Burnley and Pendle were amalgamated within this research?
For the purposes of this research, the two boroughs constitute one single mini-conurbation.-There is not any natural boundary or a gap between the two boroughs. Locally they are perceived as a uniform ,wholesome large population area. The transport and other infrastructure networks and links seamlessly join the two boroughs.
The local restaurants and food pubs regard the whole area as their single target market, which is perfect for the purpose of this research.
Burnley
Burnley is an old mill town which was an important economic centre its heyday during the industrial revolution (Lancashire County Council, 2022)
The Census 2021 population estimate total for the authority was 94,700. (Lancashire county Council, 2022)
Pendle.
The Census 2021 population estimate for the authority was 95,800. (Lancashire county Council, 2022)
A Brief Overview of the Economy of the region
According to the 2019 index, Burnley was ranked as the 11th most deprived area out of 317 districts and unitary authorities in England (Lancashire County Council, 2022)
The 2019 Indices of Deprivation reveals that Pendle was the 36th most deprived area out of 317 districts and unitary authorities in England (Lancashire County Council, 2022)
Pendle and Burnley have similar problems to other East Lancashire authorities. Higher than national average unemployment level, higher rates of crime, and a large number of population reliant on welfare benefits.
The food service industry
One of the prominent features of the two boroughs is the distinct composition of the food service industry. The industry is different to most of other unitary authorities in that it has a remarkable high number of fast food outlets, comparing to the rest of the UK
A Food Standard Agency, report revealed that Burnley has 156 takeaways, which is 1.79 takeaways per 1,000 residents, an increase of eight per cent within the last three years.
Pendle recorded 134 takeaways, an increase of six per cent within the last three years, and the equivalent of 1.5 takeaways per 1,000 residents. (Butler, 2017) According to Food Standard Agency the England average of fast food establishments per 100,000 = 96.1 (Food Standard Agency, 2017)
Conclusion of the Literature Review Section
The covid-has been an unprecedented disruption to the economy in this country. The restaurants and food pubs have had endured some of the worst effects of covid of any industry.
Although the government has been supporting the industry, many businesses succumbed to the force majeure and closed while most of the survivals are still struggling. The effects of covid are still present with various ramifications for the industry:
The cost of goods increase due to price increases for the food and ingredients, are relentlessly eating into profits. A series of price hikes, log jams and disruptions, arising form the covid-19 workplace protocols and HGV driver shortages are the major persistent issues.
The shortages of staff are also quoted as a chronic problem.
Nonetheless, the industry has had to respond to these challenges. There has been many strategies adopted, including: cost cutting, Menu Engineering, Localising and Onshoring the supply chains.
The biggest change brought in is the reconfiguration is in the shape of diversification into takeaways and food deliveries. The main causes for that are: 1.The lockdown and consequent acquisition of know-how into delivery operations. 2. A trend where consumers prefer to stay at home ordering deliveries.3. The technology in the form of online platforms that supply the interface between the restaurant and the customers and the means of delivering food via own fleet of delivery drivers.
Methodology:
Philosophical approach
In terms of philosophical stand the research design and methods could be described as influenced by the “Pragmatism” philosophical approach.
The researcher is trying to find out about this new emerging reality (reconfiguration of the supply chain) by looking also at what individual decision makers know, feel and perceive about their industry’s position and context.. This side or dimension of the research is closer to “Interpretivism” and the “subjectivist” side of the continuum. Hence the mixed-method approach.
Methods of data collection and data analysis
The research will rely on both quantitative and qualitative data, combining both primary and secondary research.
The interview parts have been analysed using common Qualitative data analysis methods using logical reasoning and interpretation of the content. The aim has been to discover common patterns, detect linkages between variables and identify any particular common narratives and views held by participants.
Ethical considerations, and limitations
The research and methods employed follow strict academic protocols designed to avoid harming anyone.
The research design and presentation ensures participants anonymity and confidentiality.
The Participants are coded as alphabetical letters. None of the organisations or the participants will be named or possibly could be identified.
The sample largely is representative of the local industry. The research results probably will be more relevant to the locality. East Lancashire is an area with old thriving textile industry that has been under some economic depression. It has in many ways its own distinctive socio-economic climate. The local restaurant industry has its own specifics and peculiarities by being formed by the local context. Bearing that in mind the results and findings will probably be extrapolated only to similar localities.
The Research:
Study A
Results
The research found that there are in total 88 full service restaurants and food pubs in boroughs of Pendle and Burnley. Of these 51 are in Burnley borough and 37 in Pendle.
By the type of cuisine: There are 32 establishments offering traditional British pub food. 18 organisations offer classic restaurant style, an eclectic mix of classic, French influenced dishes
There are 9 Italian restaurants and 10 Indian. Surprisingly there are only 4 full service Chinese restaurants in two boroughs. Another two are Turkish restaurants. There is only one restaurant offering mostly tapas and Mediterranean style smart fusion creations. Finally, there are 11 establishments offering an eclectic mix of dishes that can be enjoyed in informal atmosphere- casual style.
Capacity-size: the restaurants have been divided into 3 bands. Band-1 includes the smaller establishments that accommodate maximum 40 diners. Band-2 are medium size accommodating between 40 to 100 sit down diners. And finally Band-3 includes the largest establishments fitting in over 100 people. There are approximately around 26 of the restaurants that fall in Band 1. Most of the businesses are within the Band-2 around 47. There are only 15 in Band-3
Ownership type. Establishing ownership accurately is quite a hard task and it will involve lots of time and resources far exceeding the limitations of this project. In our research the data on ownership was obtained through looking at websites, company house and other open sources.. In this instance it was found that 15 organisations out of 88 were most likely owned by larger organisation with multi-site portfolios. The rest 73, are likely to be single site and privately owned.
The categorisation by price. The restaurants have been divided into 4 groups according to the price they charge for an average meal. Within the average meal concept the researcher has included a starter, a main course and a drink.
Group 1 – Up to £20, Group-2 £20-£25. Group-3 £25-35. Group-4 over £35
There are 10 establishments that can be allocated to Group-1. 65 establishments can be assigned to Group-2. In group-3 there are 7. Finally, there are only 3 in Group-4
Study-B
Interviews with the industry decision makers
This part of the research contains the digests of the interviews with 11 local industry decision-makers.
The table of Participants contain some information regarding the composition of the sample:
The code name are the 11 participants, coded by using Capital letters
Key: pubco– a pub chain. BrPf-stands for British Pub food. It-refers to Italian style. Casu-means casual. Ind-Indian. Cla-classical cuisine
Size by capacity, refers to the number of sit down customers that can be accommodated.
Discussions and Analysis
These are quite large urbanised rural areas with the population nearing 190, 000. There are 88 restaurants in this locality , which is twice lower than the average number of restaurants per head in this country. For the United Kingdom there is approximately one full food service restaurant for every 1320 people ( 66 million of population divided by 50, 000 restaurants) For Burnley and Pendle the number is one restaurant for every 2159. By all means, the number is significantly lower.
Importantly,there are far fewer full service restaurants locally comparing to the UK average and far larger number of take aways per head that in the UK, with following ramifications:
That proves that the number of restaurants are higher in wealthier areas. while poorer areas will have larger numbers of fast food establishments and much lower full service restaurants
The research also reveals that In Burnley and Pendle most of the restaurants operate within the lower price ranges. This will have two implications. They will probably have lower profit margins combined with lower total costs. If that’s not accurate then the restaurants wouldn’t survive in long term. The research results have shown some evidence that local restaurant in general have less complex supply chains. There has been remarkable low number of closures and insolvencies locally comparing to what has been happening countrywide according to literature review.,
There is a mixture of results. same size doesn’t fit all.
Even within such relatively small area as Pendle and Burnley there are a mixture of effects and reconfigurations for different businesses. Overall the businesses shared some common but also some unique ,very unusual experiences since the covid outbreak
The financial impact.
The research found that The financial impact has been very tough for nearly all of the local businesses, in line with the literature review findings.. Most of the businesses solely relying on the full sit-down meals have been hit hardest, while the smaller businesses that diversified easily have been doing better by having a stream of income over the lockdown periods. Although some have been enjoying higher revenues, there is hardly any corresponding profit. The revenue increases have been mostly accounted for not by the increase in the number of customers but by the increase of the prices that establishments are charging, aimed at countering the rice in total costs.
Government measure
These measures were well appreciated and to some degree admired by restaurant and food pubs decision makers in Burnley and Pendle. Nonetheless, the help was limited and didn’t cover all stakeholders and links in the supply chain. There was a clear indication by the interviewees of this research that their suppliers were a bit neglected by government
The cooperation with the suppliers.
The research results indicate that there are mixed approaches to supplier relationship management, locally. Some organisations tend to prefer cooperation with suppliers while others are short-term orientated, in search of incremental gains. The supplier have been trying cutting their own costs. Some of them have been introducing new delivery schedules, with increased minimum delivery value.
Costs
Rent. The rent and rates for the premisses are directly related to the housing and business premisses prices. Burnley and Pendle traditionally have some of the lowest house and building prices in the UK (Lancashire County Council, 2022). This is reflected in rent and rates for local businesses which is a massive advantage in tough times.
Labour shortages aren’t big problem for Burnley and Pendle
Labour shortages have been of a lesser effect locally compared to UK wide situation. There is a larger unemployment here (Lancashire County Council, 2022).
Research is showing that labour costs have been dealt by resource focusing. Opening hours have been reduced to concentrate resources, including labour. The research also discovered that some local businesses practice Cross-section training, where they provide intensives for staff to multi-task.
Customers.
The preferences have changed since covid lockdowns. Firstly, the customers seem to be now more price conscious with the tendency of spending less than they used to do. Secondly, there has been a reserved approach to going out because of the covid-19 ongoing threat. Thirdly, there is a shift towards more home deliveries.
Research also found the recent contraction of the eating out lunch market due to new working arrangements such as hybrid working. This development could be responsible for reduction of opening hours by restaurants in workdays lunchtimes.
Food delivery and takeaway market
According to (Li, 2021) the UK food delivery market is the largest in Europe and has experienced significant growth recently.
The research found that locally the smaller mostly ethnic cuisine restaurants all have been offering deliveries while the British food pubs don’t and wouldn’t be offering these services in future. Its possibly for the following reasons: 1. The delivery is locally regarded as fast food and something that British pubs never offered. Secondly the British pub food doesn’t lend itself for the delivery. It doesn’t look good in containers and boxes and cannot be represented to customers in a satisfactory manner. Fourthly, it could be to do with the fear of diluting the brand image with the local population and the core customers.
Core Findings
Smaller, restaurants operating in smaller communities have better chance of survival in an economic turmoil. For there is customer loyalty, lower overheads and costs that can be manipulated and controlled favourably. Lower house prices means lower rents and lower business rates that are directly derived from rentable value of the commercial properties.(Valuation office). Smaller restaurant and pubs can easier reconfigure their supply chain and cost structure than larger organisations.
The local businesses in areas such as Burnley and Pendle seems to be more conservative than in a more wealthier and fashionable areas. This could be associated with having core customer groups that live locally and have local affinity, loyalty and customs and well defined habits. There is locally strong resistance to change.. There is a perception locally, that what certain things are expected and what not. Not all decisions are based on purely economic and business rationale, there are customs, the way things are done and of cause the loyalties are respected.
The fashionable Onshoring and Localisation as buzz words in other places have been practiced in Burnley and Pendle forever, not intentionally, but as a bye-product of being a bit isolated. This practice is dictated by the local context and socio-economic set-up, historically. This provides both lower profits but also higher stability and predictability, comparing to the high end restaurants in the upscale and affluent areas.
The number of restaurants in locality is directly dependent on the economic well being of the population.
The industry and its supply chain are still in flux and haven’t taken shape yet. Meaning, not all effects of covid have ramified yet and industry can only balance itself and take a more solid shape when society and economy start settling down.
Local resilience. It was great to discover that the local industry overall is agile and resourceful. These businesses have been here for many years. They are normally run by local people that know their own area well and are in touch with local customers and trends. They seems to be surviving this quite well. There are not many big players here in the market. That is possibly because they can’t survive here well.
Remarkably, locally, the businesses seem to have reacted differently to covid-19 depending on size. The larger restaurants have kept the original pre-covid formulas of operations while smaller showed more flexibility and ability to diversify. There is the feeling that the smaller restaurants locally are more robust and proactive with regard to their market and environment. They are willing to harness the social media and revolution in online food delivery platforms. Tailoring offers to customers. Nonetheless, there is feeling here locally that it’s a game of wait and see till things settle down.