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Financial performance of the Slovenian restaurant sector

Author

Listed:
  • Tanja Planinc

    (Faculty of Tourism Studies – Turistica, University of Primorska, Portorož, Slovenia)

  • Marko Kukanja

    (Faculty of Tourism Studies – Turistica, University of Primorska, Portorož, Slovenia)

Abstract

Restaurant sector presents an important subsector of Slovene national economy. In 2014, there were 2.516 companies operating in the Food & Beverage (F&B) service sector (3.96 % of all companies in Slovenia), employing a total of 8.988 employees (2.08 % of all employees). An important subsector of F&B service sector (I56) is the restaurant sector (I56.101 - restaurant and inns), since it includes almost 43 % of all F&B facilities in the country. In the past, different socio-political and economic changes (e.g. implementation of Euro, entering the EU, economic crisis etc.) influenced Slovene national economy. This study tries to draw a parallel between these events and the financial performance of the restaurant sector. Purpose – This study aims to investigate the financial performance of the restaurants sector (I56.101) for the period from 1994 to 2014. Methodology – In order to achieve the main objective of the research, official financial data provided by the Agency of the Republic of Slovenia for Public Legal Records and Related Services (AJPES) was analysed. Based on literature review, a set of financial indicators were included in the study. The nominal financial data were deflated to the year 1994 constant prices in order to obtain real values of financial indicators over the analysed years. In the second part of the research, financial results were presented (and commented) through major socio-political and economic changes which affected the national economy over the past 20-years. Findings – Results indicate that restaurants have problems in achieving positive financial results (the value of operating ratio is less than one). Restaurant companies have problems in paying current obligations with cash from current assets. The share of capital in financing structure is reducing practically throughout the observed time period and as a consequence, companies are facing with indebtedness. Financial results also reveal that the EU accession process, introduction of Euro, and EU presidency had a positive impact on net sales revenues. On the contrary, financial and economic crisis negatively affected restaurants’ overall financial performance. Contribution – Research results have practical value for restaurant managers, since they enable a deeper and more profound understanding of restaurants’ financial performance. This study helps us to better understand restaurant businesses’ financial performance over the past 20-years.

Suggested Citation

  • Tanja Planinc & Marko Kukanja, 2016. "Financial performance of the Slovenian restaurant sector," Tourism and Hospitality Industry 25, University of Rijeka, Faculty of Tourism and Hospitality Management.
    • Handle: RePEc:tho:iscthi:25
    as

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    File URL: https://www.fthm.uniri.hr/files/Kongresi/THI/Papers/2016/THI_April2016_334to349.pdf
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    References listed on IDEAS

    as
    1. Marko Kukanja & Saša Planinc, 2012. "The Impact of Economic Crisis on the Motivation to Work in Food Service: The case of the Municipality of Piran," Academica Turistica - Tourism and Innovation Journal, University of Primorska Press, vol. 5(2), pages 27-38.
    2. Tanja Kosi & Štefan Bojnec, 2010. "Tax Competitiveness of Croatia and Slovenia as Tourist Destinations," Academica Turistica - Tourism and Innovation Journal, University of Primorska Press, vol. 3(1-2), pages 38-52.
    3. Daniela Venanzi, 2012. "Financial Performance Measures and Value Creation: the State of the Art," SpringerBriefs in Business, Springer, number 978-88-470-2451-9, October.
    4. Daniela Venanzi, 2012. "Criticism of the Accounting-Based Measures of Performance," SpringerBriefs in Business, in: Financial Performance Measures and Value Creation: the State of the Art, chapter 0, pages 1-8, Springer.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Benchmarking; Financial performance; Restaurant industry; Slovenia;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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