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NOW UPDATED FOR 2006!
The most recent benchmarking data for Take-Away Food Retailers is now available, both in print and in downloadable PDF format, with your purchase of the Take-Away Food Retailers Business Benchmarking Guide. (NOTE: 2006 updates not yet available in online HTML subscription version of this guide - please call MAUS Sales Centre on 1 300 300 586 for further info.)
This Small Business Profile presents the results of a survey of Take-Away Food Retailers for the financial years up to June 30, 2004. The survey was based on 20 businesses.
Success in this industry will come first and foremost from the quality of food prepared and sold. Fresh and tasty food prepared and presented in a healthy and hygienic environment is essential.
But financial success comes from achieving those quality outcomes and maintaining high personnel productivity and from using the premises effectively. In short, it means getting the right revenue from two major inputs - people and premises. Ensure that the business is open for enough hours in the day, roster people so that the right number are available to prepare, clean-up and sell the product, and have a range of complementary products to maximise on-sales from each transaction. Simple, isn't it? This guide will help you set your targets against the typical industry performances.
Survey Results
These are the results of a survey of take-away food retailers. These results should not be considered to be representative of all take-away food retailers in Australia. However, they will allow business owners to identify strengths and weaknesses in the ability of their business to generate revenue, control expenses and earn sufficient profits. This is done by identifying these elements of business performance and comparing them with benchmark performance levels currently being achieved by the sample of businesses in this survey.
Most of the take-away food retailers in our survey were from the eastern states of Australia. New South Wales was the most heavily represented area, while there were no firms located in Tasmania or the Northern Territory in our sample.
Businesses from rural towns with a population of less than 20,000 represented around 50% of the entire group. The rest were based in cities or larger regional cities and towns (population over 20,000).
Around 89% of businesses rented their premises and approximately 68% of these were located in premises with street frontage.
The following table will give you a snapshot of the variance in results found in your industry for various Key Performance Indicators (KPIs). Each KPI (shown in rows) should be considered independently of each other. For example, a business with a high percentage gross profit would not normally also have a high relative percentage of their income spent on wages.
For each KPI, the table shows the average, high and low results found in the business surveyed. The KPIs should not be 'added together' under the high and low columns as they do not necessarily relate to the same business.
The KPIs show the 4th highest and 4th lowest actual result for each performance indicator. The range of values shown therefore covers the middle 80% of reported results.
| Indicator | Average | Low | High |
|---|
| Total Income | $358,374 | $132,721 | $625,736 | | Gross Profit | 47.50% | 32.17% | 66.66% | | Wages & Salaries (staff only, not
owners) | 11.37% | 1.16% | 20.09% | | Rent of Premises# | 6.39% | 2.44% | 10.08% | | Interest, Bank Charges, etc | 2.32% | 0.37% | 4.43% | | Other Occupancy Costs | 3.24% | 1.42% | 5.91% | | Other Depreciation, Lease & Hire Purchase | 2.18% | 0.53% | 3.29% | | Advertising, Promotion & Franchise/Group
Fees | 3.70% | 0.02% | 15.13% | | Net Profit (bos*) | 12.01% | 2.39% | 21.54% | | Stockturn Rate | 30 | 15 | 47 | | Trading Hours per Week | 64 | 43 | 85 | | Sales Area as a % of Total Area | 70% | 50% | 83% | | Sales Area (sq mtrs) per Sales Person and including Working
Owners | 29 | 17 | 35 |
# calculation excludes
those firms in freehold premises *(bos) before owners' salaries
and benefits
So, how does your firm 'stack up' against these averages? These results will give you an idea of where your business falls in relation to the sample and give you a better understanding of your relative strengths and weaknesses.
The remaining expense items each represented less than 2% of total income on average; however some businesses reported some larger results for such items as:
- Printing, Postage, Stationery, Packaging & Wrapping of up to 3.85%;
- Repairs, Maintenance, Hire of Plant & Equipment of up to 3.60%;
- Staff on-costs of up to 2.03%;
- Vehicle Operating Costs of up to 5.24%.
To summarise this, larger businesses had:
- Higher net profit per working owner, despite having slightly lower net profit margins;
- Higher staffing costs, which were kept in check by better personnel productivity;
- A staffing structure where the number of employees increased, while the number of owners decreased;
- More productive use of their premises and a lower rental expense as a percentage of total income. Extra trading hours per week was a contributing factor here;
- More assets per person.
The more profitable businesses:
- Were larger;
- Reported higher gross and net profit margins;
- Had lower non-salary overheads as percentages of income;
- Had higher personnel productivity results, reflected in turnover and gross profit per person, and per dollar of wages;
- Had higher levels of ownersapos; equity in their assets.
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