Serving Fries 24 Hours a Day at McDonald\'s Source: Needleman, Sarah. \"Will Lon
ID: 383096 • Letter: S
Question
Serving Fries 24 Hours a Day at McDonald's
Source: Needleman, Sarah. "Will Longer Hours Boost Sales?,"Wall Street
Journal,
http://online.wsj.com/article/SB10001424127887324445904578286421615513846.html, posted 4/29/2013.
The issue of running a restaurant 24 hour/day is an interesting aspect of a firm's human resource strategy. We see in this article that "fast-food chains are hanging a lot of hopes on night owls and early birds." With a lean economy squeezing their sales, thousands of restaurants are extending their hours to try to spread the overhead cost by getting more people through the door.
About 45% of McDonald's 14,100 U.S. locations are now serving customers around the clock, up from about 30% in 2005. Dunkin' Donuts has doubled its number of 24-hour restaurants over the past decade to nearly a third of its 7,000 U.S. outlets. Taco Bell implemented a breakfast menu for the first time last year, and today 825 stores open between 7 a.m. and 9 a.m., instead of the usual 10 a.m.
For many franchisees, extending hours is an alluring idea, since it lets them bring in more revenue without boosting fixed costs. It can also simplify other operations issues: Outlets that stay open around the clock, for instance, can eliminate procedures for opening and closing the restaurant.
But the practice doesn't always bring big payoffs. Even though fixed costs don't rise, there are added expenses such as higher utility bills and extra pay for hourly employees working the graveyard shift. Simply finding people to work those hours can be a struggle. "It is always difficult to get people to work overnight. It's just contrary to the body," says one consultant.
Meanwhile, the boost in sales can be meager. Consumers still prefer to eat during traditional hours. Noon to 1 p.m. is the busiest time of day for quick-service restaurants, accounting for about 15% of customer visits last year. In contrast, the hours between 9 p.m. and midnight represented just 6% of visits, and the hours from 1 a.m. to 4 a.m. less than 1%.
Critical thinking questions:
1. The advantages of running a restaurant 24 hours a day include
A.
night owls tend to spend more.
B.
lower fixed costs.
C.
higher employee productivity.
D.
no need to open and close each day.
2. Finding people to work the overnight shift is so difficult because
A.
tips are lower in the later shifts.
B.
it is very boring without the daytime rush of customers.
C.
the pay is the same.
D.
few people like to work these hours.
3. The disadvantages of opening 24 hours a day include
A.
workers must be paid more per hour.
B.
utility bills are higher.
C.
it is harder to find staff.
D.
All of the above.
4. More restaurants seem to be opening longer hours, even 24 hours a day, because
A.
more people are seeking graveyard shifts because of the recession.
B.
it always increases profits.
C.
more customers may mean more profit and market share.
D.
the majority of McDonald's have switched to the 24 hour strategy.
Explanation / Answer
1. The advantage of running a restaurant 24 hours a day is to reduce and spread the fixed costs of running a restaurant
2.Finding people to work the overnight shift is so difficult because few people like to work at these hours as it is difficult to manage the body clock.
3. The disadvantages of opening 24 hours a day include - All the Above - Difficult to find people, utility bills are high, more pay per hour
4. More restaurants seem to be opening longer hours, even 24 hours a day, because more customers may mean more profit and market share.
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