Challenges of Small-Scale Enterprises in the Foodservice Industry: A Case Study of Diamond Plaza Restaurant in Baidoa City, Southwest State of Somalia

Challenges of Small-Scale Enterprises in the Foodservice Industry: A Case Study of Diamond Plaza Restaurant in Baidoa City, Southwest State of Somalia

Abshir Hassan Abdirahman¹, Issack Adam Mohamed¹, Mako Hussein Mohamed¹, Mohamed Adam Ali¹, Mohamed Dhaqane Ali², Mohamed A. Eno^2,3,*
¹Scholar, Dept. of Business Administration, University of Southern Somalia, Baidoa SWSS
²Research Fellow, Hakaba Institute for Research and Training, Baidoa, SWSS
³*Professor, Dept. of Social Studies Education, & Dept. of Social Work & Social Administration, University of Southern Somalia, Baidoa, SWSS

ABSTRACT

Restaurants, as small-scale enterprises in the foodservice industry, play an important role in society. Whether in youth employment or making meal available for members of the society, these businesses make a significant contribution to society in several ways. Yet, the challenges facing such outlets are various and need to be brought to attention in order to understand the underlying factors that need to be addressed. In order to shed light on some of these challenges, we produce a case that provides a descriptive study of the operation of Diamond Plaza Restaurant in Baidoa, Southwest State of Somalia.

INTRODUCTION

Establishment of Diamond Plaza Restaurant

Diamond Plaza Restaurant is an enterprise owned by shareholding individuals. The business is run by one of the patrons whose level of education is bachelor degree in Public Administration with no prior experience in the foodservice industry. As a licensed entity, Diamond Plaza Restaurant joined the foodservice industry in Baidoa in 2019 and changed ownership ones. It has since undergone a couple of renovation and refurbishing works. Geographically, the restaurant is located near ex-Aalim Center, an ideal square for business. It is also close to Afar-Irdood (Intersection of the Four-Roads), another very popular landmark in Baidoa city. The two landmarks add to the popularity of the restaurant, making it suitable for many people in the city center to pass by for a meal, snack, or juice.

Diamond Plaza Restaurant serves the residents of Baidoa in several ways and contributes to the livelihood of many people in the community by either serving them in-house, takeout, banquets, outside catering, or by employing some of the resident youth living in a harsh environment of unemployment (Ali 2022). Its services are utilized by the various members in the city and is considered as one of the popular places the residents prefer for leisure and business meetings. What makes it ideal is its vicinity to Afar-Irdood (Intersection of the Four-Roads) and Aalim-Center, two popular landmarks in Baidoa city. This ideal location makes it suitable for many people who come to the city center or downtown Baidoa to pass by for a drink, a snack, or a meal. This study, therefore, explores the operations and challenges of small-scale enterprises in the foodservice industry, particularly Diamond Plaza Restaurant in Baidoa City, Southwest State of Somalia.

Justification

This study was inspired by the paucity or lack of earlier scholarly studies highlighting the challenges that exist in running small scale-outlets in the foodservice industry such as restaurants, despite the remarkable contribution they make to the community. While the lack of academic inquiries on this industry is prevalent all over the country, the impact is of more concern in Baidoa where new restaurants are opened while at the same time some of the old ones are closed. Therefore, this study pioneers a new research path toward the study and understanding of the nature of challenges experienced by entrepreneurs in the restaurant business.

Significance

The current study is a valuable piece of work which scholars, including students of business administration, those in public policy and public administration, state and national policymakers, as well as investors can benefit from. More importantly, it will help entrepreneurs in the foodservice industry, particularly restaurants in Baidoa, to reflect on the significance of the sector and be familiar with the challenges prevailing in the trade and the approaches that could be taken to address them. It could even serve scholars at the global level in that it is a contribution that comes from a city that has survived over thirty years of chaos, instability, anarchy, fragile administrations and poor governance resulting from a protracted civil war.

Keywords: Entrepreneurship, foodservice industry, hospitality,  small-scale businesses, tourism

LITERATURE REVIEW

When viewed from the culture of eating and dining outside home, food service and the outlets that offer it, restaurants for example, have a long history in human life and experience. According to one description:

The food service industry encompasses all of the activities, services, and business functions involved in preparing and serving food to people eating away from home. This includes all types of restaurants from fine dining to fast food. It also includes institutional food operations at locations such as schools and hospitals, as well as other specialty vendors such as food truck operators and catering businesses (Food Service Industry: Definition and History).

Another source explains the business as: “establishments primarily engaged in preparing meals, snacks and beverages, to customer order, for immediate consumption on and off the premises” (Government of Canada, 2012), contributing considerably to society in terms of job creation and to the economy in aspects of revenue collection nationally and internationally (Pilis et al. 2022). And as Edwards (2013:223) contributes, “eating and eating out are not simply the ingestion of nutrients and there are a myriad of other factors, which need to be taken into consideration in the understanding and enjoyment of the meal experience.”

In a majority of the studies on foodservice, the industry and enterprises involved in the business are subsumed into what experts term ‘‘hospitality’’ (e.g. Wearne and Morrison, 1996) while elsewhere in the literature it is lumped with “tourism’’ (Kotler et al. 1999). With no sufficient literature to cover businesses related to the foodservice industry, the field remains underserved in the scholarship and in particular what pertains to restaurants and dine in food outlets in general (Lyons, 1996; Johns and Pine 2002)

Although the food service industry has features which set it apart from other areas of the service sector such as financial and professional services (Johns 1999 as cited in Johns and Pine 2002) and tourism (Pilis et al. 2022), such diversity is not often contextualized in discussions as much as characterized in the literature on hospitality or the tourist. Yet, the food service industry is important in that it focuses on the quality and choice of food in a foodservice outlets, premises traditionally believed to offer a wide experience in meal choices and taste (Johns and Pine 2002 citing Campbell-Smith 1967).

Even though more studies are available on food service in the American and Asian contexts, not much has been written that analyzes the African market. However, the few  that have been written highlight the potential of the business in creating promising opportunities for small scale entrepreneurs (Mwema and Crewett, 2019) while improving the marketing potential of local food and traditional cuisine (Du Rand et al., 2003; Mnguni &  Giampiccoli, 2019; Zocchi and Fontefrancesco 2020).

In their well-informed analysis, Mueller & Kleiner (2004:519) quote Angelo & Vladmir, (2007) regarding classification of food service outlets into “either full-service restaurants or fast-food service restaurants.” They further highlight that “[w]hile fast food restaurants are generally defined by menu simplicity, service speed and limited seating, full-service restaurants can either be characterized by buffet offer, family service offer or fine dining experience” (Ibid, p. 519.) The other category the coauthors Mueller & Kleiner mentioned with reference to Ditmer (2002), and Dipierto et al. (2007) include “casual and specialized independent or chain restaurants that serve different types of snacks and biting such as sandwich shops, pizza places, chicken grills, hamburger joints, fish and chips (Mueller & Kleiner 2004:519).

RESEARCH METHOD

Theoretical Approach

The methodological approach the study uses is that of the qualitative case study (QCS) research  as discussed in Gerring (2007), Creswell (2014), and Eno & Dammak (2014). According to Boblin et al. (2013, p. 1268) discussing the works of QCS gurus like Yin (2009), Stake (1995, 2005), and Merriam (1988), “the case study approach allows for a holistic understanding of a phenomenon within real-life contexts from the perspective of those involved,” such as the respondents contributing to this study due to the relevance of their experience of the phenomenon under discussion. In addition, the case study (CS) method illuminates the complexities underlying the factors under investigation (Boblin et al. 2013; Stake 1995).

Data Collection

The study used interview in which the respondents answered to the questions posed to them. Respondents were given ample time and opportunity to express their views and experiences related to the subject under investigation. To capture the real picture of the situation, the study chose to be purposive in design thereby collecting data from employees selected for their long experience working at Diamond Plaza Restaurant. As Charmaz explains, “Qualitative interviewing provides an open-ended, in-depth exploration of an aspect of life about which the interviewee has substantial experience, often combined with considerable insight” (Charmaz, 2008, p. 29; see also Charmaz & Belgrave 2012).

Data was collected in the presence of at least three members of the research team: while a team member was posing the question to the interviewees in the Maay language spoken in the area, in separate meetings, the other members were writing down the responses in either Somali Maxaa language or in English for their convenience. After the day’s scheduled interview session was over, the team would meet to compare and discuss the data and then write the draft in English immediately. Data was then saved in a computer for safe custody and with a back. Informal discussions with the Diamond Plaza staff, a few customers observation of the restaurant activities were also used to strengthen validity of data by using these different data collection methods.

Thematic Question: What are the operational challenges facing Diamond Plaza Restaurant?

Study Population and Sampling

The study focuses on business outlets or restaurants in the food industry, particularly restaurants in Baidoa. Of the various outlets in the city, a single restaurant was selected as a case study to explore its operations and challenges as viewed from the experiences of the employees. The study selected to interview five staff members of Diamond Plaza Restaurant including the owner, a manager, a chief cook, two waiters, and a cashier selected from the different sections of the restaurant. Unfortunately, the study could not capture the view of the only female staff in the restaurant due to her unavailability on the various occasions the interviewers visited the outlet.

Data Analysis

The study followed narrative analysis of data whereby an analysis and discussion were used simultaneously. However, in order to not impair the qualitative essence of the responses, the study followed suggestions by Flyvbjerg (2006) and Peattie (2001) to demonstrate the responses verbatim, where necessary, precisely as expressed by the respondents. Presenting the holistic nature of a case study report while quoting Peattie (2001:260), Eno and Dammak (2014: 4) maintain: “…in a case where the researcher attempts to summarize detailed data which contains ‘mutually exclusive concepts,’ there is a possibility that ‘the very value of the case study, the contextual and interpenetrating nature of forces, is lost.”’ Further analyzing the subject from Flyvbjerg’s perspective, Eno and Dammak corroborate that the case study:

has to be presented with its varied perspectives ‘like life itself” so that ‘the different things in the case’ will either attract or repel the various readers. The opportunity in the presentation of this kind of rich data is that ‘[r]eaders will have to discover their own path and truth inside the case,’ rather than delivering to them a personal analysis of a phenomenon. Flyvbjerg clarifies his point here: ‘Case stories written like this can neither be briefly recounted nor summarized in a few main results,’ the allusion being that ‘[t]he case story itself is the result.’ (Eno & Dammak 2014:4).

In order to rectify weaknesses and strengthen dependability of the results, auditing was conducted by way of member checks technique in which confirmation of the interviewees was sought and affirmed, as recommended by Lincoln and Guba (1985) and Seale (2000).

FINDINGS AND DISCUSSION

Daily Operation

Supplies

Usually, Diamond Plaza arranges delivery of its supplies, including all types of essential food items needed in the restaurant, on daily basis and early in the morning. Order is forwarded to the suppliers of the different products most of which are sourced from the main Baidoa market through local business

people. The strategy of daily purchases of supplies, rather than stocking them, is influenced by the Somali tradition of usually shopping for most perishable foods on daily basis. These may include the variety of meat products consumed for the household and in the restaurants such as veal, mutton, chicken, fruits and vegetables. “It, therefore, is not customary or a common practice for restaurants in Baidoa to serve clients with meat or other cooked or uncooked foods that have been stored in the fridge or freezer overnight,” according to one of the respondents.

The Menu

Work in the restaurant starts its immediately after Fajr (early morning) prayers when breakfast is prepared for customers who go to work early and would like to pass by for a hot breakfast. The morning menu includes ukun-la-dubay (fried eggs), shakshuka (eggs scrambled with vegetables,), beer-gaal (camel liver), beer-erang (mutton liver), suqaar (tiny chunks of stewed meat), kalaankal (fried meat), and aleeso (stewed goat meat), all served with canjeero (Somali pancake or bread).

According to one of the interviewees, “The number of customers served for breakfast in the morning is approximately 40-50 people.”

Diamond Plaza Restaurant’s menu for lunch consists of rice, spaghetti, a variety of meat products to choose from such as mandi-gaal (oven-roasted camel meat), mandi-erang (oven-roasted mutton), mandi dooro (oven-roasted chicken), mutton stew, dheylo (oven-grilled capretto), served with vegetables and a selection of fresh fruit juices. “On a normal business day, at least around eighty (80) meals are served to the customers for lunch,” explains an interviewee before adding, “This number does not include what we sell as outside catering and take-away meals, which literally boosts our business.” For dinner, the usual menu consists of spaghetti, rice, bread-buns, sabaayad (a chapati-like flat bread), and a selection of fast foods that include burgers, shawarma, boiled eggs, egg-sandwich, chicken-wrap, and sambuusa (Indian samosa).

On a normal day,” replies a respondent, “about fifty to sixty people are served for dinner, in addition to many take-out orders.” On the introduction of new cuisine , one the respondents acknowledges how it is not easy to introduce new tastes and varieties of new dishes when the clients are not accustomed to it; yet you cannot survive in the business without adding a new item to the menu every after-a-while. “That is in fact one of the challenges we face in the foodservice industry here in Baidoa,” he said.

The busiest meal times for Diamond Plaza Restaurant are lunch time and dinner time. The reason why lunch and dinner are so popular is because the restaurant is a socializing place for business discussion after work during the day while residents and even visitors come in the evening “because of our strategic location which is convenient for our customers to come and enjoy our dinner then easily return home walking.” As our informant explained, “There are also people who own various businesses in these areas, especially women who trade in Qaat (leaves of the Catha edulis plant), who do not return home for lunch and others who retire home late in the evening; so, they come to the restaurant for a quick meal before returning to their businesses which are usually within the city center area—within our vicinity.” Apart from the business owners and visitors from other districts, regions or states within the country, there are a number of politicians and political observers who find it difficult to eat in insecure restaurants; hence their preference to dine here.”

Comparing the days of the week, Friday is the busiest day at Diamond Plaza. Notably, it is the weekend; a day of rest when many Muslims recuperate from the workload during the week. It is a day when many people go to the big mosques for Friday prayers, which gives Diamond Plaza Restaurant “another advantage of location” as it is very close to popular places of worship like Masjidka Jaamaca (the Jaama’ Mosque) and Masjidka Carabta (the Arab Mosque), as many of the worshippers prefer to have their Friday lunch in the restaurant.

Seating Capacity

The seating capacity of the restaurant is about 70, with each set of four seats sharing a table, “although about 600 seats are in store and for use only during special occasions when they are needed for large gatherings such as weddings and other social occasions.” The seating area includes family rooms and a VIP section of a convenient ambiance that has about 10 seats with suitable number of tables.” The number of chairs and tables as well as the division of the seating area into “ordinary”, “family rooms” and “VIP” adds more attraction to the idealness of the restaurant because families and female customers who do not want to be seated in the ordinary seating area can be accommodated in these selected zones. The restaurant has added value since its inception because the patrons are mindful of food quality, hygiene and food safety. They use good quality cleaning materials in the kitchen including detergent, and sanitizers, “making sure to keep even our restroom clean.”

To a certain degree, the achievement the Restaurant has made in its short existence, particularly during the inauguration period, the proprietors acknowledged: “We used the local radio stations and social media like Facebook to inform the public about the newly-opened foodservice outlet. It was a good strategy because to enter the market, we needed people in the district of Baidoa and Bay region and in other parts of the country to know about this new establishment.” The approach of advertising foodservice outlets to reach and attract a large number of clients is a fact recommended by several authors as a good strategy of lifting the business (Haque et al. 2012; Kim et al. 2019).

Outdoor Catering

The foodservice enterprise provides various catering services outside the restaurant and often delivered to the client’s premises—house or office. Sometimes there are wedding ceremonies or other events and celebrations for which people order a meal or “supplying outside catering to institutions that hold in-house training programs for their staff.” As one of the cooks explained, “Depending on the period of the year, there are some days which we sell more food for outside catering than we serve to in-house diners. In fact, we sometimes supply three or four events of not less than 40 or 50 persons for breakfast and lunch.” Occasions like these, although not planned for on daily basis, play an important role in the business. As it happens, “Customers place their order at least a day before their event so that we make the arrangement as a special duty assigned to certain members of the staff.”

Management and Staff

Two managers oversee the vast activity and operation of the restaurant,  working on a roster planned ahead of time, taking shifts on alternative days or parts of a day. However, Diamond plaza has one supervisor who observes all operations of the restaurant and follows everything that is in or out. Quite unlike other restaurants where a waiter brings the bill to a client, Diamond Plaza assigns this task to two billing officers in two different shifts who check the order/meal on the table and write the bill accordingly.

Unlike some local restaurants in Baidoa, Diamond Plaza Restaurant has head chefs who work on shifts. Although the number of head-cooks is not clear, it is assumable that there is only one head-cook on duty in every shift—either in the morning shift or in afternoon shift. These are assisted by cooks who are on shifts. The alternative shifts for the cooks means the staffs have some time to relax after working in the kitchen for many hours. It helps the cooks to rejuvenate from the day’s fatigue and reflect on other important issues such as personal or family matters. Replying about the other staff, one informant replied, “There are shifts according to which they come to work.”  In the same way, the waiters work on alternative  morning or afternoon shifts. These work along with two cashiers whose duty in the restaurant is based on shifts. Although the restaurant employs many workers, staff training is overlooked.

CHALLENGES OF DIAMOND PLAZA RESTAURANT

Like all businesses, Diamond Plaza faces challenges; some that are unique to it and others that are common to business enterprises in Baidoa and the country as a whole. On some of the challenges facing the restaurant, one of the respondents elaborates:

Sometimes, especially in certain seasons and even situations, prices of vegetables just rise high up and become almost unaffordable and there are several reasons for this. One of them is that fruits and vegetables are sourced from suppliers who bring them from Afgoye, Lower Shabelle, making the products more costly for restaurants due to the long distance of transportation. So, you see, we spend a considerable amount of money on purchasing thereby reducing our revenue in profits.

The problem of fruits and vegetable supplies, as noted here, really remains one of the biggest challenge the residents of Baidoa have to deal with by coming up with a viable solution, which at the moment seems unavailable or underutilized. A more feasible solution would be for growers in Baidoa and its rural agricultural villages to consider growing these products locally in order to decrease the cost incurred as a result of the distance. Another challenge is mentioned: “Many people eat on loan; they say open a book for me or for so-and-so, and it will be paid at the end of the month; but they do not pay for years.” As one of the informants states, “We work under a dual taxation system, like all businesses in Baidoa district and some other parts of the country, which lowers our intended and targeted profit margins, but we cannot increase the prices.” The situation reminds of the comment by Katherine Paine that “The moment you make a mistake in pricing, you’re eating into your reputation or your profits” (cited in Pal and Ardhaya 2020:8). Yet, the business has to survive! In addition to the challenges mentioned, Diamond Plaza Restaurant experiences its worst challenges of low  business turnup “during the cropping and harvesting season when there are fewer people coming to the market. Because the people in Baidoa are mostly farmers, this means, the fewer people there are the less money we earn.”

Challenges during the COVID-19 Era

COVID-19 had its toll on Diamond Plaza restaurants as it has affected businesses and livelihoods in all parts of the world (Roy et al. 2021; Aday and Aday 2020; Sardar 2022). One of the cooks explains, “COVID-19 has hit our business very hard because people were afraid to come together to social venues; they became skeptical about hygiene and food safety as the media kept ‘scaring people’ about everything.” Another worker, a waiter, added that “the government of the Southwest State imposed a lockdown which has caused problems for restaurants—a very significant drop in customers.” Due to the scarcity of space, it was difficult to set up a 1-meter social distancing for clients to follow the health advice of the WHO, the Ministry of Health of the Southwest State and the Baidoa District Administration. “COVID-19 has been devastating to the restaurant business due to high food prices, while customers would not appreciate the increase.”

Technological/Innovative Challenges

One of the challenges of the current technology is related to the EVC + mobile-phone currency transfer system which does not display receiver’s name to help the sender confirm the destination. In such cases, the payee can mistakenly send it to the wrong person. “But now that we have a shorter number which displays the recipient’s business name, it has become easier for clients/diners to send money to the restaurant. We expect this to improve the mis-transfer to wrong numbers which was a problem,” a patron corroborates. Diamond Plaza has not installed modern technology of the current computerized restaurant management information system applied in food outlets in Baidoa and other parts of the country that facilitate management process of the enterprise. The technology, although useful in partially reducing the costs and enhancing efficiency (Kocaman and Turkmen 2022), has not yet been considered for use in the restaurant.

Marketing Challenges

There are more restaurants in the city, especially in this city center area and busy marketplaces in general. Therefore, “the new restaurants may possibly be doing better in the types of food and varieties of their drinks”, but we hope to catch up with them. In his discussion, the interviewee mentioned an important reality regarding the cultural change in the food industry, particularly the foodservice outlets such as restaurants. “The old restaurants in the city are doing something different,” said the patron. “They are trying to improve the taste of food. We are stepping up our services and improving our menu by adding new cuisine such as Biryaani, which we find diners to be very fond of, making some clients to refer their friends to our restaurant.” This could be an ideal marketing strategy but, as Thomas suggests, it is not easy adding or labelling a menu (Thomas 2016). However, “when the restaurant introduce food recipe which is very tasty and the customers like it, they do the advertisement by telling their friends by word of mouth.”

However, in order to attract more customers, one of the new marketing strategies Diamond Plaza Restaurant uses is “Discount for the customers who are the familiar faces, the regular or loyal customers who usually frequent here to eat.” Similarly, as one of the patrons noted, “We give a warm welcome to the new and old customers” so that we win the trust of new customer and make the old customer maintain his/her loyalty to our brand of food. “Another strategy one of our strategies is, according to a senior manager, “We must provide good quality service, cook gourmet quality food and serve food that tastes deliciously and uniquely to the diner.”

Future Challenges

On anticipating future challenges, the patrons of Diamond Plaza express worries on “decline to the number of customers due to the proliferation of restaurants in the city. There are new restaurants opening in the city center and outside the center too, which means an unavoidable split in customer distribution and choice: clients in the neighborhood of those areas may not walk the distance or take bajaaj (a common tricycle for public transportation) or a dhoweeye (small taxi vehicle) to come to us for food unless they are loyal to our brand.” Currently COVID-19 seems to have dissipated from the city, but in case it recurs, “the problem may cause monumental financial decrease; in a massive way; in a very terrible manner!” The problem of insecurity during local elections held in Baidoa becomes a cause for threat with possible impact on restaurant businesses and shrink the number of customers dining out and many people avoid frequenting crowded areas and unnecessary social gatherings.

CONCLUSION AND RECOMMENDATIONS

Conclusion

The study explored the operational strategy of Diamond Plaza Restaurant in Baidoa, Southwest State of Somalia. It interviewed a number of the staff among them the patrons/managers, cooks, waiters, and cashiers to gain in-depth insights into the restaurant. It provided a detailed description of the numerous activities undertaken in the restaurant.

The study further revealed that Diamond Plaza Restaurant has advantage of good location and good flow of customers who eat in the restaurant for convenience and taste of food. However, there are some challenges the management has to address in order not to fall short of customer expectations. The point on customer expectation needs to be taken seriously noting the fact that on whether the management has done a survey to understand clients’ perception, all respondents admitted that no such study has been done before.

Recommendations

Based on the findings and results of the study, the following recommendations are suggested for consideration in order to improve the performance of Diamond Plaza Restaurant:

• Improvement of hygiene and sanitation
• Improvement of cleanliness including the kitchen environment and the utensils
• Introduction of new cuisine to attract more customers
• Staff training in order to maintain higher quality service delivery than competitors
• Introduction of restaurant management information system to enhance efficiency
• Conduct of marketing/promotional drives to stay in touch with the community
• Conduct of surveys to enhance operation, maintain clients and attract new ones
• Staff training is essential and should be considered

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