The market you target

Restaurants operate in one of the most competitive environments.

With such low barriers to entry in the restaurant industry, it is an attractive choice for up-and-coming entrepreneurs, making it even harder to become competitive enough to survive. According to Big Hospitality, restaurant insolvency has jumped 31% in the last quarter of this year[1], making things harder as sales have not recovered quickly enough to compensate for the sudden increase in expenditures.

Nevertheless, the objective of this post is to discuss how restaurants understand the market they operate in and if there is clarity around what helps individual businesses to become more competent.

It may seem easy for a supermarket to identify what its competitors are. If there is a Tesco next to Sainsbury’s everyone would agree they compete against each other. However, with dozens of restaurants offering a different type of food, service and timing - assessing the perfect match becomes more complex. Two restaurants located near each other may compete in more than just the same location.

Thus, I think is important to step back and explain the how competition is understood in restaurants. For restaurants, a competitor is any business that sells food and drinks to the same target market.

You might find yourself targeting the same people as similar restaurants but receiving a wider or different crowd than the originally planned. This makes the process of finding who your restaurant competes against much harder.

Restaurants have both direct and indirect competitors but can also cross-sell customers with any type of food and entertainment outlet. Because the competition seems too broad to track and measure accordingly, finding the closest results to the perfect match is key to creating the perfect plan for your restaurant.
 

So, how can we help your restaurant find the best set of competitors to make you thrive?

 
Attempting to help restaurants to find their competitors, we realized we might not be using the right rationale when trying to understand what is happening in people’s mind when they are searching for a place to dine.

When was the last time you really put yourself in the shoes of the customer by removing all the biases you have and allowing yourself to be critical to your business? We recommend that you become brutally honest towards your restaurant, or at least for a couple of hours!
 

We will assist you in finding the most valuable competitors by replicating what happens in the customer’s mind when searching for restaurants.

1. bighospitality.co.uk/Article/2021/11/22/UK-restaurant-insolvencies-jump-31-in-last-quarter