Excellent Year Despite Food Cost Problem
By G. M. Hostage
Marriott Restaurant Operations
Operations had an
and this in the face
of sharply higher
raw food costs and
on obtaining menu
Greater numbers of people are
eating away from home, and sales
of all major divisions set records.
Our major problem last year
was sharply rising food costs and
our inability to increase prices
proportionately—either because of
Government controls or concern
about consumer resistance. Our
fresh meat cost index alone rose
27 percent last year, and the index for other purchased items
rose 32 percent. These numbers
had risen only a few points in each
of the past several years.
However, despite the pressures
of 1973, we are proud to report
that earnings for our Group hit
new highs, and for the second
year in a row our profit margin
from operations improved slightly.
dinner houses were opened in
Rockville, Maryland and in suburban Philadelphia and both are
exceeding sales projections.
FARRELL'S ICE CREAM PARLOUR RESTAURANTS, with whom we merged
just a year ago, has been a very
strong addition to our family of
food service facilities. There are
now 30 company-owned units,
compared with 24 a year ago.
hot shoppes cafeterias increased their profits and sales per
unit. A combination of tight management controls, improved efficiencies, and flexibility in menu
presentation aided in combating
the dramatic increase in food costs.
hot shoppes restaurants, although profitable, had a difficult
year due to continuing increased
competition from fast-food operations and dinner houses.
big boy coffee shop sales increased substantially and total division profits improved. However,
delays in granting of price relief
following higher raw food costs
slowed the growth in profits.
tollroad restaurants appeared
to suffer only negligible impact
from gasoline shortages this past
summer. Sales showed good gains
but profits were unsatisfactory due
to higher food costs, restrictions
on price adjustments which require
tollroad authority approval, and
opening costs for The Pier, a new
attraction in St. Petersburg, Florida.
roy Rogers fast foods units have
been one of the bright spots of
the year. Nineteen new Roy Rogers units were opened, including
13 successful conversions from
Jr. Hot Shoppes. The Roy Rogers
concept has a unique place in the
fast-food market—with a strong
1969 1970 1971 1972 1973
adult appeal, as well as good acceptance by young families.
jr. hot shoppes remaining in the
system are doing well. Sales per
unit were ahead of comparable
units last year by 16 percent. After 13 conversions to Roy Rogers,
there remain 32 units, primarily in
the Washington metropolitan area,
where further expansion is planned.
food service management continued to gain new accounts. The
Business and Industry Division
added to our growing metropolitan New York account list such
major corporations as American
Telephone and Telegraph, Avon
and Mercedes-Benz. Our Hospital
Division added six new accounts,
and our Automatic Food Service
Division continued its good growth.
FAIRFIELD FARM KITCHENS had the
first profitable year in its six-year
history, and external sales increased by more than one third.
We made important progress on
our entry into the theme park business during the year. Rezoning of
land was granted by local governments in all three areas where we
plan to build—in Virginia near
Washington, D.C, in the Chicago
area and in Santa Clara, California, south of San Francisco. We
have begun staffing for the park in
Santa Clara and expect to break
ground this fall, with opening
scheduled for 1975. We hope to
begin construction in either Washington or Chicago next spring.
In 1974 we'll see continued expansion in all areas, but especially
in Farrells, Dinner Houses, Big
Boy, Roy Rogers, and Food Service Management.
We are confident that the great
public appeal of our restaurants
will enable us to have another
good year in 1974.