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On the surface, establishing and running a successful restaurant may seem like an exciting prospect. But there’s an immense amount of work and planning that goes into it, and having the right information to make well-informed decisions is critical for success. Market research is one of the most important steps for budding restaurant owners to take—as it can be the difference between having a profitable restaurant or a flop.
When it comes to market research for a restaurant, there are numerous things to consider. As the foodservice market evolves, more and more data points become available to maximize opportunities. To help, here’s a look at the top 10 things you should consider when conducting market research for a restaurant.
1. Competition
It’s important to review the competition in the area to identify what strategies may be successful for your restaurant. Determine the competition’s menu items, what they’re offering that you’re not, and what opportunities for differentiation might be possible. Also, check if there are any established loyalty programs or promotions the competition is running to gain insights as to what incentives might be successful for guests.
2. Local taste
Research the local preferences, as well as traditional ethnic dishes and ingredients favored in the area. Identifying the type of food customers prefer and any potential specialties can help the restaurant cater to local tastes and create the perfect menu.
3. Costs
Consider the costs associated with running a restaurant. Calculate all of the costs related to purchasing the ingredients for the food items, plus operational costs for running the restaurant, such as rent, utilities, employee salaries, and equipment. It’s important to take the time to crunch the numbers and determine the cost to produce each menu item and identify how to run a cost-effective operation.
4. Demographics
Understanding the demographic makeup of the local population can help you target the right audience with your menu and prepare for the restaurant’s launch. With demographic insights, you can determine which menu items should be offered to best fit local tastes and income levels.
5. Menu Development
Menu development is a crucial part of any restaurant. Keeping up with menu trends and modern flavor combinations is important to keep customers engaged. Taking a look at new flavors customers are currently enjoying in the area, as well examining what competitors offer can help spur new ideas to develop the perfect menu.
6. Suppliers
Researching ingredient suppliers to determine the best ones to use for menu items is a must. Selecting local suppliers is ideal to ensure fresh produce and support local businesses. Quality ingredients should be used, but also consider the associated costs with using each supplier.
7. Dining Out Trends
Examine restaurants and dining out trends in the area. Look into what other establishments are doing that customers find appealing. For example, if the restaurant is thinking about launching a late-night menu, then understanding habits of other late-night restaurants in the area can be beneficial.
8. Technology
Having the right technology in place is critical for a restaurant. Research the types of restaurant-related technology available and select what is best aligned with the operations. This includes point-of-sale systems, mobile applications for ordering, reservations, and customer relationship management (CRM) software.
9. Delivery/Take-out
Staying ahead of delivery and take-out trends are key to a restaurant’s success. It’s important to research requirements to offer delivery and be familiar with the competitive landscape in the area. Additionally, agreements with third-party delivery companies should also be researched.
10. Advertising & Promotion
At the end of the day, customers need to know that the restaurant exists. While word-of-mouth will do some of the work, you need to have a sound advertising and promotion strategy. Take the time to research what has worked for other restaurants in the area, and what appeals to the local demographic.
Market research is essential when opening a restaurant—and the more information you have, the better you’ll be able to make informed decisions to drive success. Being aware of the above considerations is key to conducting market research in the foodservice industry. With the right data-driven insights and tools, you’ll be in an even better position to make decisions with confidence.
