The Financial Impact of Poor Food Safety Management Across the food industry, there is an increasing focus on ensuring that the food we eat is safe. The public is now much more aware of food safety issues, helped by the rise of review sites and social media which provide a fast channel to share good or bad dining experiences.
Regular inspections of food safety management systems are proven to help safeguard the public. In the UK, the Food Standard Agency s Food Hygiene Rating Scheme (FHRS) is increasingly visible and trusted by consumers. While isolated incidents can affect restaurants with even the highest ratings, putting in place a rigorous food safety management system is proven to protect the public and the financial health of the restaurant itself.
The financial impact of getting food safety management wrong is immense. High profile cases such as Chipotle and Taco Bell in the US demonstrate the reputational and financial damage that food safety incidents have on a business, its share price and its revenues. In Los Angeles, the introduction of a grade card scheme, where restaurants had to display their food rating was followed by a 13.1% decrease in hospital admissions related to foodborne illness. 1 A previous food poisoning outbreak at Taco Bell led to a decline in sales for over a year. In the UK a pub chef and manager were jailed for falsifying food safety records. quarterly profits down by 44% After a series of food poisoning issues, Chipotle reported: 2 share price fell by 44% UK pub chain fined 1.5m Company value reduced by $11bn after a woman died from food poisoning after eating Christmas dinner at its hotel restaurant. 1. Journal of Environmental Health: http://www.ncbi.nlm.nih.gov/pubmed/15794461 2. The New York Times: February 2, 2016 Chipotle Food-Safety Issues Drag Down Profits The New Yorker: December 10, 2015 Can Chipotle Recover From Food Poisoning 3 The Financial Impact of Poor Food Safety Management
To find out the public s view of food hygiene, Checkit carried out extensive research with UK consumers on their attitudes to food safety, hygiene ratings and customer service. The findings are stark - UK consumers are united in not tolerating poor food safety: 75% would either never visit a food outlet implicated in a food poisoning/hygiene incident or only if it had changed hands 61% Almost two thirds won t visit a restaurant of any sort that had a Food Hygiene Rating of 2 or less Cleanliness and Food Hygiene Ratings have more influence than customer service when it comes to deciding whether or not to return to a restaurant This management report outlines the key findings from the research as well as providing help and recommendations to help the industry guard against food safety incidents. 4 The Financial Impact of Poor Food Safety Management
Key Findings The Checkit research covered: The impact of low food hygiene ratings on where consumers chose to eat What factors put customers off returning to restaurants The impact of previous food hygiene incidents on choosing somewhere to eat
KEY FINDINGS 1 Food Hygiene Ratings matter whatever the type of restaurant Consumers were asked whether a Food Hygiene Rating of 2 or below (classed as Improvement Necessary, Major Improvement Necessary or Urgent Improvement Necessary), would impact their choice of various types of restaurant. The answer was an overwhelming yes: 61% refuse to visit any type of restaurant with a low food hygiene rating. Just 9% said they d ignore the food hygiene rating But they also said they d be extra careful in what they ordered, and suspicious of how it was served. This implies they would limit their spend in these establishments and that it would hardly be the most relaxing dining experience for guests or staff. 69 % 57 % 64 % 55 % 63 % 60 % 62 % 61 % Fine dining restaurant Neighbourhood restaurant that is not part of a chain Takeaway (such as Indian, Chinese, Kebab) Café/coffee shop Chain restaurant Pub serving food Sandwich shop Average Would a poor Food Hygiene Rating affect your choice of restaurant/café/sandwich shop? 6 The Financial Impact of Poor Food Safety Management
KEY FINDINGS 2 Cleanliness more important than customer service Consumers were asked to rank the factors that would put them off most from returning to a restaurant/takeaway/coffee shop in the future. Essentially consumers would rather put up with poor service from rude and unhelpful staff than eat at dirty restaurants. 66% of respondents rated unclean or dirty premises as the first or second reason for not returning to a restaurant, while 57% said a low food hygiene rating. Just 16% cited slow or poor service as stopping them coming back to a restaurant. 32 % 66 % 57 % 29 % 16 % Unclean/ dirty premises Low food hygiene rating Rude or unhelpful staff Staff that don t know what they are doing Slow or poor service Which of these factors most puts you off going back when eating out/visiting a takeaway/visiting a coffee shop? 7 The Financial Impact of Poor Food Safety Management
KEY FINDINGS 3 Food hygiene incidents destroy businesses Consumers were asked about their attitudes to visiting restaurants that had suffered a food hygiene incident. Would they dine there and what would affect their decision? The key finding is that the public is extremely unforgiving of establishments that have been implicated in a food hygiene incident. 75% of consumers said they would either never return, or would only dine there if the restaurant had changed hands. This demonstrates that poor food hygiene practices risk a restaurant s survival, financial health and add considerably to costs over the long term until customer trust is rebuilt. 42 % 32 % 22 % 3 % No, never No, not unless, it had changed hands Yes, if its food hygiene rating had improved dramatically Yes, if recommended by someone I trusted Would you visit a restaurant that had been implicated in a food hygiene incident? 8 The Financial Impact of Poor Food Safety Management
CONCLUSIONS The Food Hygiene Rating Scheme is highly valued by the public 5 5 5 61% of consumers won t go to premises that score 2 or below on the Food Hygiene Rating Scheme. This shows they recognise and understand the scheme, and use it as part of choosing where to eat. What they are probably less aware of is that poor ratings can be a consequence of not having recorded and provided the correct paperwork to demonstrate compliance, rather than poor hygiene practices. Restaurants therefore need to pay as much attention to record keeping as to ensuring their processes are adhered to. The public expect the same standards across all restaurants Whether it is fine dining or a sandwich shop, the position is broadly consistent poor food hygiene ratings will drive away customers. only 9% of consumers will ignore the food hygiene rating when making their choice and even these said they ll be extra careful about what they order. So, whatever size or type of business you are, you must take food hygiene ratings seriously. 9 The Financial Impact of Poor Food Safety Management
CONCLUSIONS Cleanliness and hygiene rank way above staff attitude when it comes to repeat business Customer service is less important than hygiene and cleanliness to consumers. 50% more diners would come back after poor service if premises were clean 41% would put up with poor service if delivered in a restaurant with an average or good food hygiene rating. Food hygiene incidents close restaurants for good 75% of consumers won t visit somewhere that has suffered a food hygiene incident. A food hygiene incident is so serious that only 3% would return on the recommendation of someone they trusted. 22% would only visit if the Food Hygiene Rating had dramatically improved, meaning that owners would need to invest heavily over a long period of time to meet standards, rebuild trust and attract back these customers. Could your restaurant survive losing 75% of its customers? At a time when information on issues can be easily shared on social media, reported to environmental health officers or through review sites, this demonstrates the real risk of poor hygiene to business survival. 10 The Financial Impact of Poor Food Safety Management
How to guard against food safety incidents Effective food safety management systems are crucial to preventing food safety incidents that could shut a restaurant down. They provide a full audit trail to present to environmental health inspectors, and demonstrate that operating processes and food preparation procedures meet the highest standards. However, existing paper-based systems handicap restaurants by making it difficult, time consuming and therefore costly to manage and document information. They don t provide a verifiable record and don t remind staff when vital checks need to be completed. Now there s an affordable and simpler alternative: 1 3 Cloud based systems replace paper records with interactive digital checklists, meaning that record keeping is simpler, faster and gives a timestamped record of who carried out a check. This also reduces the management time needed to prepare records for inspection as everything is stored digitally and can be accessed at the touch of a button. Using the Internet of Things and wireless sensors to enable automated, continuous monitoring, avoids the need for staff to take manual readings. This gives a more comprehensive, up to date picture of key environmental conditions such as temperature or humidity. 2 Enforcing best practice. Digital checklists guide staff through the tasks they are undertaking, ensuring they complete them on time, in the correct way and help them achieve consistency. If issues are found, digital work management systems can advise staff on the best cause of action, while flagging any problems to management. 4 Gain control with real-time reporting. By automatically time stamping, uploading and storing food safety management information in the cloud, managers have a real-time view of what is happening on the ground. They can be notified of issues immediately and can spot trends over time, or within groups of restaurants, enabling them to improve operating processes and safeguard food safety. Research source: Toluna 1,011 UK consumers, Q1 2016 Copyright Checkit 2016 Checkit.net Broers Building JJ Thomson Avenue Cambridge CB3 0FA www.checkit.net Sales and Service Enquiries T +44 (0)1223 941450 General Enquiries E info@checkit.net Linkedin/company/Checkit.net twitter.com/ekt_checkit