Reference no: EM132747783
Question -
Extract A: Mexican could be the next global fast food
The UK's market for eating out was valued at £80 billion in 2015 with forecasts for continued growth. Within this market Mexican food is now the most popular, having knocked Chinese food off the top spot. In 2015 Mexican fast food outlets were the fastest growing eateries on the high street, experiencing 71% growth.
Extract B: Chilango
Chilango is an award winning chain of 10 fast food Mexican restaurants based in London. In 2015 it achieved sales revenue of £6,969,185. Chilango plans to open outlets in over 50 locations across the UK in the next 5 years. Forecast sales are shown in table 1.
Table 1: Forecast sales revenue for Chilango
2016 £9,676,971
2017 £16,169,570
2018 £25,473,044
2019 £37,628,453
2020 £53,037,276
The key factors driving growth will be the opening of new restaurants as well as increasing sales in existing stores. The business will aim to increase sales volume through local marketing, improving food and operations and introducing online ordering.
1a. What is meant by sales volume?
1b. Using the data in extract B calculate the forecast growth in sales revenue at Chilango from 2015 to 2020.
1c. Assess two factors affecting the likely accuracy of Chilango's sales forecasts from 2016 to 2020.