Cutting costs by reducing quality drives customers away

If the food and service go downhill, customers will stop coming back. Is this any way for a restaurant, or any business, to trim costs?

Saturday evening, having just returned from our summer break and with Ramadan about to start, my wife and I visited one of the capital's malls to stock up on some basic necessities for the refrigerator and larder.

Before settling down to the serious business of pushing the shopping trolley around the supermarket, we decided to have a quick meal. We called at a restaurant which we have frequently patronised over the years.

To our surprise, all of the waitresses had changed since we last visited five or six weeks ago, and the friendly managers who had greeted us on every previous visit were nowhere to be seen.

But we thought nothing of this, and went ahead and ordered, and then sat back and waited.

And waited, and waited. Eventually we ordered coffee to pass the time, in the hope that we could finish it before the food arrived. As we might have expected, the two arrived together.

The coffee was fine, but I wish that I could say the same about the food. My salad had clearly been prepared many, many hours earlier, and the lettuce leaves had already started to turn brown.

And my wife's pasta, which should have had a modest amount of sauce, was instead swimming in a milky liquid, so that it was more like a soup with a bit of pasta in it.

We asked to speak to the duty manager, who also turned out to be new. We made our complaints, gently.

In reply we were told that not only was the chef new but that, as we had guessed, the salad had been purchased, prepacked and pre-sliced, from the adjacent supermarket early that morning. The manager was unable to tell us if, as we suspected, this was actually produce that had been left over from the night before.

Enquiring further, we were told that the staff, manager, chef and waitresses had all just joined, and that their predecessors had been dismissed, had had their visas cancelled and had been sent back to their countries of origin.

Our assumption was that the owners of the restaurant had decided that they needed to cut overall costs - and, given the way in which the rent charged by this mall has risen over the past few years - despite the less-then-vibrant local consumer economy - I can understand why they would wish to do so.

I wonder whether the government-imposed restrictions on annual increases in residential rentals are also applicable to shops and restaurants in malls?

Cutting expenditure on staff costs - for I assume the new employees are receiving lower salaries - is one way of reducing overhead. But it does seem a rather peculiar approach if, at the same time, the quality of the food falls, the amount of time taken to prepare it increases and the service deteriorates in other ways as well.

Whereas formerly we were greeted by friendly faces, this time there wasn't a smile to be seen.

And following our complaint a good restaurant manager might have had the initiative to offer us a small discount on our bill. Not surprisingly, we weren't offered one, though that might simply have been because the manager wasn't authorised to offer one.

Will we return? Well, perhaps - my wife is disinclined to do so, although, because of the convenience of the restaurant's location, I might be prepared to give it another chance, at least for a cup of coffee.

Thanks to poorly-conceived cost-cutting, though, the restaurant's owners have succeeded in putting off two loyal customers who have given them regular business since they opened.

And given the obvious deterioration in standards, I doubt that we are the only ones.

I can understand that when times are hard, profit margins take a hit. A long hard look needs to be taken at ways of improving them. Cutting expenditure on staff or on materials, food in this case, is one way of doing that, but there are other ways too. Special offers to attract more business, perhaps, or a modest increase in prices, or a combination of all of the above.

Reducing quality while maintaining the same prices, though, seems a remarkably short-sighted way of trying to tackle the problem, particularly in a business that is wholly dependent on providing a service to the public.


Peter Hellyer is a consultant specialising in Emirati culture and heritage

Published: August 2, 2011 04:00 AM


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