I don’t agree that the margins in restaurant operations are massive. I’ve worked in the hospitality industry for 8 years, 6 in operations and 2 in marketing for a well-known casual dining brand. It’s true, there were good/healthy margins to be enjoyed in the past, but in recent times with the cost of gas, electricity, transporting of food & drink, and the general cost of food and drink, on top of rising labour costs, it’s an industry under extreme pressure right now. In the year to Feb 2022, our revenue was up globally on previous years to record levels, but we only just broke-even in terms of operating profit.
A chunk of operators are turning to order pay at table functionality to re-work their business model and reduce dependence on labour to cut costs and insulate customers from dramatic price increases way beyond the level of price increases that are currently happening. Order pay at table allows you to potentially, if executed well, reduce the number of people you need on a typical shift. It also has huge analytical, marketing and insights benefits.
I would still expect Towers/Merlin’s RTP restaurants to be making a decent profit because their prices are so inflated and the quality is so poor. But the restaurant industry right now is simply not one where you can enjoy huge margins.