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Chefify - Pros of Opening Near Competitors & How to Gain Competitive Edge

Friday, April 20, 2018

When you’re opening a new restaurant the very first decision you’re likely to come up against is whether to choose a location where you’re part of a foodie scene or where you stand out.
Although your first instinct might be to position yourself away from the competition, there are actually many advantages to being close to other restaurants, particularly when you know how to establish a competitive edge.

  • The appeal of a cluster
    Competitors often choose to set up shop close to each other to take advantage of the same customer demographics. As long as you’re confident in your concept that’s no bad thing. You’ll benefit from the magnet effect of a group of similarly appealing eateries and could get the overflow traffic from some of the more established brands.
  • Community support
    If a competitor has been in a location for a decade then you know that there is a community there willing to support that kind of restaurant. In many ways, opting for a place where there is already an established competitor is the simplest way to identify a local market.
  • Complementary restaurants
    The ideal is to find restaurants that are complementary competitors, i.e. where your concepts and menus don’t directly compete but are similar enough to engage the same market.
  • Lots of restaurants = high traffic
    Regardless of competitors, high traffic locations are highly desirable when you’re opening a new restaurant. Marketing spend can be significantly reduced by positioning yourself in a location where you’re part of the food news of a well-established culinary community.
  • Competition is no bad thing
    Whether it’s your kitchen staff looking to outperform a nearby competitor, or your marketing team determined to beat the others with promotions, sometimes having a direct competitor nearby can push you to do better and do more.
  • How to gain the competitive advantage
    If you’re choosing a location that’s filled with other similar restaurants then being able to maintain a competitive advantage is going to be key.
    •    What are your competitors’ strengths? Either beat those strengths or focus on developing and promoting different strengths of your own.
    •    What are the weaknesses of existing restaurants? Offer something new and solve existing problems.
    •    Your restaurant culture can be a significant and sustainable competitive advantage – who are you and what do you stand for as a business?
    •    What makes your offering stand out – identify what it is that makes you different in the market, whether that’s a better menu, more efficient processes, a stronger team or more innovative food. Then build upwards and outwards from that.