Classification and Efficiency Analysis of Slovenian Restaurant SMEs

Abstract

Focusing on the characteristics of restaurant smes, the purpose of this paper is to use (1) a cluster analysis (ca), and (2) data envelopment analysis (dea) approach to classify restaurant smes into different groups based on their physical and managerial characteristics and attempts to determine whether differences exist in the efficiency performance of different groups. The study has conducted a two-step ca and dea analysis to identify the effects of restaurant characteristics on efficiency performance. This method takes into consideration the presence of heterogeneous subsets in efficiency assessment. Restaurants were preselected based on their operational characteristics. smes whose only source of income was their restaurant business were included in the study. Surveys were performed with restaurant managers, and the firms’ financial reports were analysed. Two diverse groups were identified: smaller restaurants with younger and less experienced managers, and bigger restaurantswith older andmore experiencedmanagers.The various physical (number of seats, years of business activity) andmanagerial (age, and professional experience) characteristics appeared to significantly affect restaurant types differently. Established restaurants withmore seats, older andmore experienced managers proved to be more efficient. This is the very first study to analyse Slovenian restaurant businesses efficiency with a combined ca-dea approach. Primary data was collected by surveying restaurant managers while secondary financial data was provided by national tax authorities after the implementation of fiscal cash registers. Keywords: cluster analysis, dea, efficiency, restaurant industry, Slovenia, smes https://doi.org/10.26493/2335-4194.11.31-42