Scenario:

Pastas R Us, Inc. is a fast-casual restaurant chain specializing in noodle-based dishes, soups, and salads. Since its inception, the business development team has favored opening new restaurants in areas (within a 3-mile radius) that satisfy the following demographic conditions:

• Median age between 25 - 45 years old
• Household median income above national average
• At least 15% college educated adult population

Last year, the marketing department rolled out a Loyalty Card strategy to increase sales. Under this program, customers present their Loyalty Card when paying for their orders and receive some free food after making 10 purchases.

The company has collected data from its 74 restaurants to track important variables such as average sales per customer, year-on-year sales growth, sales per sq. ft., Loyalty Card usage as a percentage of sales, and others. A key metric of financial performance in the restaurant industry is annual sales per sq. ft. For example, if a 1200 sq. ft. restaurant recorded $2 million in sales last year, then it sold $1,667 per sq. ft.

Executive management wants to know whether the current expansion criteria can be improved. They want to evaluate the effectiveness of the Loyalty Card marketing strategy and identify feasible, actionable opportunities for improvement. As a member of the analytics department, you've been assigned the responsibility of conducting a thorough statistical analysis of the company's available database to answer executive management's questions.

Pastas R Us, Inc. Database (n = 74 restaurants) Per Person Sales Growth Over Loyalty Card % of Annual Sales Median HH Income Square Feet Average Spending Previous Year (%) Net Sales Per Sq Ft (3 Miles) Obs 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 SqFt 2354 2604 2453 2340 2500 2806 2250 2400 2709 1990 2392 2408 2627 2500 1986 2500 2668 2517 1251 2998 2625 2300 2761 2764 2430 2154 2400 2430 2549 2500 Sales/Person 6.81 7.57 6.89 7.13 7.04 6.93 7.11 7.13 6.58 6.77 6.66 7.03 7.03 7.00 7.38 7.18 7.35 6.95 7.02 6.85 7.16 6.99 7.28 7.07 7.05 6.54 6.70 6.91 7.58 7.03 Noodles Database - Page 1 of 3 SalesGrowth% -8.31 -4.01 -3.94 -3.39 -3.30 -1.94 -0.77 -0.37 -0.25 -0.17 0.47 0.55 0.77 1.92 2.05 2.12 2.84 2.88 3.96 4.04 4.05 4.05 4.24 4.58 5.09 5.14 5.48 5.86 5.91 5.98 LoyaltyCard% 2.07 2.54 1.66 2.06 2.48 2.96 2.28 2.34 2.20 2.34 2.09 2.47 2.04 2.02 2.01 2.64 2.22 2.07 1.94 2.17 0.72 2.00 1.81 2.13 2.50 2.63 1.95 2.04 1.41 2.05 Sales/SqFt 701.97 209.93 364.92 443.04 399.20 264.64 571.59 642.25 461.45 638.82 484.38 581.09 267.71 572.84 586.48 368.73 351.47 458.24 987.12 357.45 405.77 680.80 368.02 303.95 393.90 562.12 494.88 310.07 373.46 235.81 Printed 07/18/2020 MedIncome 45177 51888 51379 66081 50999 41562 44196 50975 72808 79070 78497 41245 33003 90988 37950 45206 79312 37345 46226 70024 54982 54932 34097 46593 51893 88162 89016 114353 75366 48163 Median Age % w/ Bachelor's (3 Miles) Degree (3 Miles) MedAge 34.4 41.2 40.3 35.4 31.5 36.3 35.1 37.6 34.9 34.8 36.2 32.2 30.9 37.7 34.3 32.4 32.1 31.4 30.4 33.9 35.6 35.9 33.6 37.9 40.6 37.7 36.4 40.9 35.0 26.4 BachDeg% 31 20 24 29 18 30 14 33 28 29 39 23 22 37 24 17 37 22 36 34 26 20 20 26 21 37 34 34 30 16 Doane/Seward Pastas R Us, Inc. Database (n = 74 restaurants) Per Person Sales Growth Over Loyalty Card % of Annual Sales Median HH Income Square Feet Average Spending Previous Year (%) Net Sales Per Sq Ft (3 Miles) Obs 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 SqFt 3653 2440 2600 2160 2800 2757 2450 2400 2270 2800 2520 2487 2629 3200 2335 2500 2449 2625 3150 2625 2741 2500 2450 2986 2967 3000 2500 2600 2800 2986 Sales/Person 6.84 6.94 7.07 7.00 7.08 6.75 6.81 7.64 6.62 6.76 7.11 7.05 6.90 7.17 6.75 7.45 7.00 6.96 7.30 6.96 6.71 6.82 6.58 7.56 6.98 7.28 6.76 6.92 6.73 6.91 Noodles Database - Page 2 of 3 SalesGrowth% 6.08 6.08 6.13 6.27 6.57 6.90 6.94 7.12 7.39 7.67 7.91 8.08 8.27 8.54 8.58 8.72 8.75 8.79 8.90 9.12 9.47 10.17 10.66 10.97 11.34 11.45 11.51 11.73 11.83 11.95 LoyaltyCard% 2.13 2.08 2.73 1.95 2.04 1.62 1.95 1.64 1.78 2.23 2.15 2.83 2.37 3.07 2.19 1.28 1.76 2.51 1.90 1.98 2.41 2.17 2.16 0.29 1.85 1.88 2.19 2.56 2.16 2.10 Sales/SqFt 413.08 625.22 274.30 542.62 178.56 375.33 329.09 297.37 323.17 468.84 352.57 380.34 398.12 312.15 452.16 698.64 367.19 431.93 367.06 400.53 414.36 481.11 538.06 330.48 249.93 291.87 517.40 551.58 386.81 427.50 Printed 07/18/2020 MedIncome 49956 45990 45723 43800 68711 65150 39329 63657 67099 75151 93876 79701 77115 52766 32929 87863 73752 85366 39180 56077 77449 56822 80470 55584 78001 75307 76375 61857 61312 72040 Median Age % w/ Bachelor's (3 Miles) Degree (3 Miles) MedAge 37.1 30.3 31.3 29.6 32.9 40.7 29.3 37.3 39.8 33.9 35.0 35.0 35.9 33.0 30.9 38.5 40.5 32.1 34.8 38.0 37.0 34.7 36.4 36.8 32.2 34.8 36.7 33.8 34.2 39.0 BachDeg% 28 36 18 36 18 24 22 29 25 28 40 39 30 17 22 29 19 29 18 19 34 25 30 21 30 30 28 31 16 31 Doane/Seward Pastas R Us, Inc. Database (n = 74 restaurants) Per Person Sales Growth Over Loyalty Card % of Annual Sales Median HH Income Square Feet Average Spending Previous Year (%) Net Sales Per Sq Ft (3 Miles) Obs 61 62 63 64 65 66 67 68 69 70 71 72 73 74 SqFt 2223 2300 3799 2700 2650 2500 2994 2718 3700 2000 2400 2450 2575 2400 Sales/Person 6.77 7.33 7.87 6.95 7.33 6.95 7.21 7.25 7.65 6.93 6.79 7.37 6.76 7.97 Noodles Database - Page 3 of 3 SalesGrowth% 12.47 12.80 13.78 14.09 14.23 14.60 14.88 15.42 16.18 17.23 18.43 20.76 25.54 28.81 LoyaltyCard% 1.98 0.87 1.07 3.38 1.17 2.14 0.93 2.22 1.68 2.41 2.81 1.09 0.64 1.77 Sales/SqFt 453.94 512.46 345.27 234.04 348.33 348.47 294.95 361.14 467.71 403.78 245.74 339.94 400.82 326.54 Printed 07/18/2020 MedIncome 92414 92602 59599 72453 67925 42631 75652 39650 48033 67403 80597 60928 73762 64225 Median Age % w/ Bachelor's (3 Miles) Degree (3 Miles) MedAge 34.9 39.3 35.6 36.0 41.1 24.7 40.5 32.9 30.3 36.2 32.4 43.5 41.6 31.4 BachDeg% 40 33 28 23 16 25 25 18 15 19 27 21 29 15 Doane/Seward