PESTLE restaurant industry

PESTEL ANALYSIS: RESTAURANT INDUSTRY

P – Political

When looking at the restaurant industry there are always government regulations to look at. There are many government agencies such as the FDA that restaurants must be aware of. Regulations for restaurants will include hygiene, health, and food standards. Restaurants must have certain licenses and permits for certain features that are served such as alcohol.

E – Economic
In the United States there are always economic trends for every industry. When the economy is bad many people cut out eating out at restaurants as one of their first priorities to save money. Restaurants are aware of this and need to adapt to economic changes in the community. Restaurants must also look at banking trends and interest rates to ensure capital and profitability.

S - Social
When looking at a social aspect of a restaurant it is important to consider the audience that you want to target and create an environment that will accommodate that customer. If you are in the southern part of the US the main food item there is BBQ items or if you are in the northwest many of the items will feature seafood. Unless you want to find a niche it is important to understand these trends. It is also important to understand the religion of people where the restaurant is located because some cultures do not eat certain food.

T – Technological
There is so many new technology out there to reduce operation costs in restaurants such as POS systems and new ways too cook food. Technology can reduce cost but can also reduce customer experience and owners must be aware of this and find a correct balance.

E – Environment

Environmental issues for restaurants all revolve around waste. A restaurant produces many pounds of waste and must find environmentally friendly ways to reduce this while also considering cost and water use. There must be a balance between recyclable goods and disposable goods that can be biodegradable.

L - Legal
When operating a business there are many laws with workers. Working in a restaurant does not take much education and owners must be aware of age laws and workers that are legal citizens. Also, if a restaurant serves alcohol it is important to obey the law and enforce it throughout the business.

I believe the factor that has the most impact on the restaurant industry is the social aspect of the pastel analysis. I feel this is the most important because this is the most customer driven aspect to a customer driven industry. People go to a restaurant for a social environment and this environment is what sets successful restaurants apart from one another. It is important to notice the customer, how the demographics of a customer base act and how to act on these demographics through a business.