RESTAURANT COMPETITIVE ANALYSIS: KNOW WHERE YOU STAND

Compile a list of competitors by neighborhood and identify them as “direct” or “indirect.”

• Direct competitors: These are other restaurants whose offerings are the same as yours and who happen to be going after the same pool of customers. For example, if you sell sushi, your other direct competition would be a neighboring sushi shop.

• Indirect competitors: Any other restaurants who, while not offering what you offer, might attract the same customer base. Using the same sushi shop as an example, an indirect competitor could be a burger joint down the street that pull in the portion of your customers who like sushi and burgers.

Next assess each of your competitors with a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats). A SWOT analysis lets you assess what your competition offers customers (strengths),  what’s hindering them (weaknesses), what they can do better (Opportunities), and their vulnerabilities (threats). In doing so, you can get a realistic and complete view of your competition. 

For these next steps, do a more specific SWOT analysis in addition to your research. You can also do a SWOT for your own restaurant concept — look for gaps, analyze opportunities, and compare with your competitors.

Look into their operations with these types of questions: What’s their concept type? What sets them apart? Are they a franchise, group, or independent operation? When were they founded? What are their hours of operation? The number of seats? Do they offer delivery, pick-up, or use an app?

Investigate their menus, determining their best sellers, differentiators, specials, and pricing strategies. How much variety do they have in regard to dishes or ingredients used? Is there anything unique or stand-out about their offerings? Are their portion sizes big or small? Compare your answers with your own menu.

What kind of marketing do they do? Do they have a strong online presence, detailed website, active social media accounts, or lots of online reviews? Do they offer promos like ongoing deals, special events, coupons, or freebies? Give them a follow on social media and monitor their advertising and marketing strategies — you may learn what to do, or what not to do.

Become a customer by visiting their establishments to get first-hand experience of their ambiance, service, and overall customer experience. Take note of their operations, staff interactions, wait times, cleanliness, and any other stand-out features. Then dig into their customer reviews to see what they’re doing well, and how customers think they’re missing the mark.