Today’s story came from an unusual source: my iPod.
I first heard this story read as part of Slate magazine’s daily podcast and I have to confess that I nearly fell out of my chair — okay, off my seat on the bus — when I got to this part:
Operating margins—the holy grail of any business—at P.F. Chang’s 190 stores rose from 12.8 percent to 14 percent …
Wha?
I did not expect a sentence that started with “operating margins” to end in double-digit figures, and here’s why … in Canada, the average pre-tax profit as a percentage of operating revenue was just 4.0%. That’s for 2007, the latest year for which data is available. Across the country, profit margins range from a high of 6.7% (Alberta) to a low of 2.1% (Newfoundland and Labrador).
I don’t mean to suggest that P.F. Chang’s figures are unattainable, or that such margins don’t already exist here in Canada, in chains or independent operations. But I’m pretty hard to shock these days, so take my near wipe-out on the TTC for what it’s worth.
If you’re curious about the tactics P.F. Chang has employed to keep margins high even in these tough times — from staff retraining to prix-fixe specials to more modest expansion plans — check out the full article over at Slate: The Secrets of Chang.
