The relationship between sustainability practices and firm Performance in local restaurants in Laoag City, Ilocos Norte, Philippines

Abstract

A B S T R A C T

This study was conducted to determine the sustainable practices and their effects on the firm performance of local restaurants in Laoag City, Ilocos Norte, Philippines. Using a descriptive-correlational research approach, data were gathered from 16 local restaurants via a structured survey questionnaire and analyzed using statistical methods, including frequency and percentage, weighted mean, Mann–Whitney U test, Spearman’s rho, and Pearson-r correlation.

Findings revealed that the extent of sustainability practices among local restaurants was rated high. The degree of seriousness of problems encountered was rated moderately serious, while the overall firm performance was rated high. Results further showed that the form of business organization and years in operation had no significant effect on sustainability or firm performance. However, significant negative relationships were found between average monthly sales, net income, and selected sustainability and performance indicators. Sustainability practices were found to be significantly and negatively associated with the severity of problems encountered and positively associated with both financial and non-financial performance. Moreover, problem seriousness was negatively correlated with firm performance.

The study concluded that sustainability integration enhances restaurant performance by improving efficiency, profitability, and customer satisfaction while reducing operational challenges. Restaurant owners should institutionalize sustainability as a core business strategy through staff training, adopt energy and water-saving technologies, and implement proper waste segregation. Local governments must support BMBE registration, grant tax exemptions, and offer incentives such as property tax rebates, reduced permit fees, grants, low-interest loans, and technical assistance for water and energy savings and waste management. Partnerships with local producers should be promoted to build sustainable supply chains. Policymakers should reward sustainable practices with recognition, awards, and access to contracts, and integrate sustainability into regulations. Future research may replicate the study in other areas and include customer perception and digital innovation to further examine the long-term effects of sustainability on business performance in the restaurant sector.