Luby’s Cafeterias, Part II
Uploaded by mebassakwards on Oct 26, 2011
This paper continues the examination of Luby’s, with emphasis on the company’s current status, its finances, strengths and weaknesses, and potential future. (19.5 pages; 5 sources; MLA citation style)
I Introduction
Luby’s is a chain of cafeterias and other types of restaurants with its headquarters in San Antonio. It enjoys a significant presence in Texas, with nearly 200 properties in that state; it has other establishments in other Southern and Southeastern states as well.
It has been prosperous for a number of years, but has lately begun to experience significant difficulties and a substantial decline in revenue accompanied by a loss of market share.
This paper explores the company’s current status, its financial situation, and its strengths and weaknesses. It also features an external environmental analysis and describes Luby’s strategies for the future.
II Current Status
Luby’s actually dates back to the early part of the 20th Century, but the organization in which we are interested took shape in 1948 in San Antonio, when the first cafeteria opened. It was Luby’s idea to serve good food at reasonable prices, using the cafeteria concept. (Luby’s, PG). (A cafeteria can obviously serve many more people more quickly than a sit-down restaurant.)
Luby’s located their cafeterias close to businesses, residential areas and retail centers, opening them for lunch and dinner only. The food was well-prepared but not exotic; what we might call “good plain cooking.” Luby’s put an emphasis on using fresh ingredients and making many of their dishes from scratch:
“Each Luby’s Cafeteria prepares substantially all of he food served, including breads and pastries. … Company policy allows each manager to buy the ingredients for his or her cafeteria from vendors of his or her choosing … Managers supervise the preparation of … entrees … vegetable dishes … salads … and desserts … and decide on each day’s menu which generally differs from cafeteria to cafeteria.” (Menger, p. C307).
Although the company uses a standard set of recipes, the fact that managers buy locally and “tailor” the recipes to regional tastes means that each cafeteria is a good “match” for its local customers. At its height, Luby’s operated over 220 locations, mostly cafeterias; according to the 2003 Third Quarter Report, this number has now dropped to 161 locations, of which two are seafood restaurants, one is a steak buffet, 26 are “all you can eat” concepts, and 132 are traditional cafeterias. ...