VALUE CREATION AND PROFITABILITY OF QUICK SERVICE RESTAURANTS IN LAGOS STATE, NIGERIA

Abstract

The Quick Service Restaurant (QSR) industry makes a significant contribution to the Nigerian economy; providing substantial revenues to government and sizable employment opportunities at the processing and retailing levels. Previous studies in Nigeria scarcely investigated organisational value creation impact on firm performance particularly in the QSR industry. Despite the increasing popularity of “eating out,” Quick Service Restaurants in Nigeria have shown a negative growth rate, with decline in total income, as it has become increasingly difficult to satisfy modern restaurant customers who seek unique experiences that are more than just consuming food. Hence, this study investigated the effect of value creation on profitability of Quick Service Restaurants in Lagos State, Nigeria. Cross-sectional survey research design was adopted. The total population was 414 owners/managers, accountants of Quick Service Restaurants in Lagos State, Nigeria. A well-structured and validated questionnaire was used for data collection. Cronbach’s Alpha reliability coefficients for the constructs ranged from 0.72 to 0.92. The response rate was 73.2 percent. Data were analysed using descriptive and inferential statistics. Findings revealed that value creation dimensions had significant effect on profitability(Adj. R2 = 0. 395; F(6,296) = 33.801, p< 0.05).The study concluded that value creation had significant effect on profitability of Quick Service Restaurants in Lagos State, Nigeria. The study recommends that Quick Service Restaurants (QSRs) in Lagos State, Nigeria should continue to deploy their resources effectively and efficiently, identify and satisfy the interests of their key stakeholders in order to enhance profitability.