Restaurant Trade Area Research

Just last month in this post http://restauranttradearearesearch.com/2008/08/02/perfect-demographics-perfect-traffic-counts-closed-restaurant/ I talked about the closing of a Backyard Burgers location at the intersection of Sandy Plains Rd and Hwy 92; and now, sadly - more fast food locations have bitten the dust nearby further `up’ (west) on Hwy 92 nearer to Woodstock.

Both went down about the same time last month - a 15 plus years open KFC; and a Zaxby’s which had been open several years. The KFC was in the midst of many fast food competitors - across the street from McDonald’s and Mrs Winners (Fried Chicken) with Capt’.D’s, Dairy Queen, Burger King and Chick Fil-A within eyesight; in addition to other restaurants within a mile such as Arby’s, Subway, Taco Bell, Wendy’s, Checkers and several sit downs such as Ruby Tuesday and O’Charley’s, Po Folks and several long time non brand restaurant choices. Yes, this was and is a developed area.

But, things change, - the Walmart across from KFC moved 2 miles up the road a few years ago replaced by a 4 day a week furniture wholesaler. The drugstore within the KFC retail pad went empty last month — the same retail pad saw a long standing BBQ location Slopes fold  about a year ago.

Our family used the KFC about once a month; usually for dinner - nearly always thru the drive-thru. Usually for the `dinners’ for 2.99-3.99 - buy three of those and you really felt like you got a sackful. Somehow, the drive-thru never backed up.

So, now, the nearest KFC is about 3.7 miles away, (this was about 2.1) and on our way back from Atlanta up Hwy 5. So, instead of using that one twice in last 5 years — I’ll probably bump into the once every six month category - and also eat at  Mrs Winners more often. Reverse attrition to the survivors.

I wonder if the KFC on Canton Rd will `market’ to the closed KFC’s trade area - I wonder if they have done any trade area surveys - to know that info?

The Zaxby’s closing was equally as surprising and it also was a place our family went to about once every 6 week or so. It was located about 3 miles from our home and we used it for evening eat-in meals (you only deal with Zaxby’s drive thru once) - it had good quality. It was NOT located in a highly concentrated fast food strip but did have local competitors. Indeed, a new chain Kayson’s, opened and shortly after the Zaxby’s was history.

The point of this posting is that the competitive environment is tough and getting tougher. Knowing your local trade area via real marketing research is not a luxury anymore. Indeed, if you do your whole market with a MarketView — you may know which `available’ fast food locations fit your market development plan without overlapping your own existing stores penetration. You will be able to do your own `attrition’ estimates based on trade areas.

Please visit www.squidoo.com/tradeareasurveys for more information about how I can help your marketing decisions.

Today’s Restaurant Links

Krystal’s Offers Up `Sonic-like’ Positioning

http://www.prweb.com/releases/2008/09/prweb1289284.htm  Is this `the idea’ that could make Krystal a player?

`Local Restaurant Dishes Out Manners’

http://www.kcsg.com/news/regional/28032164.html  `The Cell-Phone’ reminder. Quick read. Find out who is using `the reminder’.

`California Moves Closer To NYC-Like Menu Law’

http://www.desertdispatch.com/opinion/state_4250___article.html/mandate_menu.html 

`Fast Food Outlaws’

http://www.smh.com.au/news/world/fastfood-outlaws/2008/09/06/1220121599393.html  A less than flattering look at the USA from our friends down-under.

`Changing Lifestyles and Rising Incomes To Affect Restaurant Sales’

http://www.prweb.com/releases/restaurants_pizza/fast_foods_dining/prweb1302024.htm

The above story is about the GLOBAL MARKET and not the changing lifestyles here in America (less eating out, trading down). Nevertheless an in-depth viewpoint to read.

Hello, welcome back - I hope your Labor Day holiday was relaxing - that said, my thoughts go out to previous restaurant clients in Louisiana. Today, I want to spend this paragraph encouraging restaurant owners to `get the big view’ of their real market situation. To understand that NEXT year - with proper information - you can do real local marketing that impacts your units.

How you ask?

By doing my MarketView research for which you can find more info about at www.squidoo.com/tradeareasurveys — or go to the site for contact information for my services. If you call, make sure to ask me about the project I did for a fast food chain last year that involved doing over 10 stores and testing over 12 new site locations within the market - for under 30,000.00.

Now - onward to today’s restaurant links:

When Sonic Comes To Town

http://blogs.wenatcheeworld.com/thay/2008/08/28/sonic-wenatchees-newest-health-food-restaurant/ Just a fun story about a NEW restaurant for this community - Sonic. Covers the insanity of a grand opening, roller-skates, and the dealing with an unfamiliar menu by the consumer. Includes less than glorified pictures of the product served and at 10 bucks nonetheless.

Athens Burgers Opens New Restaurant

http://www.mantecabulletin.com/main.asp?SectionID=28&SubSectionID=58&ArticleID=59128&TM=16382.6 Here’s a newer concept to read about. Interesting combination.

Slow Food Conference

http://www.dallasnews.com/sharedcontent/dws/ent/stories/DN-slowfood_0901gl.ART0.State.Edition1.4da40ac.html More and more stories emphasis is on going local with sources of products. Love the `meet the fisherman’ concept.

Wendy’s Rolls Out Double-Stack Nationwide at 99 Cents

http://sev.prnewswire.com/food-beverages/20080829/CLF006A29082008-1.html  Also, is giving away thousands of double stacks over the next year too - find out how.

Discount Dining

http://www.baltimoresun.com/entertainment/dining/bal-bz.restaurants02sep02,0,3747451.story Covers the story as to how restaurants are responding with lower price points in this economic downturn. Covers the marketing efforts of Boston Market, BJ’s Restaurants and Starbucks to name just a few.

Police Warn about TAKEOVER Robberies

http://www.nrn.com/breakingNews.aspx?id=358002&menu_id=1368  Good advice about this growing concern.

Spying On Suburbia - Eating At Arby’s

http://www.richmondchic.com/index.php/mind-body/article/spying-on-suburbia-a-home-like-arbys/268  Strange to interesting perceptions from this blog about Arby’s — 16.00 for two fast food.

Kiss an Attendent at a Fast Food Restaurant

http://www.latimes.com/theguide/music/la-gd-scavenger1-2008sep1,0,5200506.story Wild scavenger hunt includes wild ideas.

Last year, I personally interviewed several thousand fast food customers (in-store and drive-thru) in a variety of fast food brands for Trade Area Research purposes. (Do you need trade research before expanding your market?) This was normal for me as I have  personally interviewed thousands of fast food customers for dozens of years. And, as you might know, certain questions are nearly standard on questionnaires trying to understand customer behaviour - such as the fast food restaurant that the customer uses `most often’.

In the 1980’s and even into the late 1990’s - when adults answered that question for me — when the answer was McDonald’s - they would immediately offer a `reason’, in an apologetic tone, which invariably was `the kids’. That is not to say that I didn’t hear `they are everywhere’ and `they are cheap’ on occasion. Nevertheless, the interesting thing was that `other brands’ such as Wendy’s or Arby’s or Chick-Fil-A  or others (such as sandwich chains Subway) - most often users ALMOST NEVER offered up `embarrassing’ reasons for their usage of a particular brand most. Only McDonald’s. It was almost a case of doing `marketing’ too well.

Then, McDonald’s focused less on kids and more on product and product quality. I began to hear folks say that they liked a `particular new product’ at McDonald’s that they went for `most often’. Kids, as a reason, was definitely fading quickly (I informed my clients who at first seemed surprised in the early 2000’s — it was the kind of information that only came from literally being on the ground for multiple brands for decades) - the return of McDonald’s was approaching.

The moral - If the biggest can change a negative perception — other brands, most of which have neutral images, can also build a positive one - like McDonald’s has done.

Today’s Restaurant Links

“People are requesting kids premiums that are more socially responsible,”

http://www.ajc.com/business/content/business/stories/2008/08/16/restaurant_toys_educational.html Wendy’s and Chick-Fil-A jump on `Educational’ kids toys. Strong feedback. Three minute read.

Individual Responsibility And Its Enemies

http://www.mtexpress.com/index2.php?ID=2005122089  Bringing ethics into the fast food discussion with force. Shows how `choices’ and having a restaurant business are related. Three minute read.

Parking Mad At McDonald’s

http://icwestlothian.icnetwork.co.uk/courier/news/tm_headline=parking-mad-at-fast-food-chain&method=full&objectid=21526230&siteid=92284-name_page.html After the positive McDonald’s opinion above - here is an example of not respecting the customer. Probably.

Arby’s Expands Savings Potential With Cellfire Mobile Coupons

http://money.cnn.com/news/newsfeeds/articles/prnewswire/200808130900PR_NEWS_USPR_____AQW047.htm Here’s a new coupon niche.

Are Restaurant Stocks A BUY?

http://www.chicagotribune.com/business/yourmoney/chi-ym-restaurants-0817-cpaug17,0,4787885.story Article says yes if you have a longer time horizon of 2-3 years; while detailing how over stocked the trade areas are with restaurants. Predicts store closings. Four minute read.

Many Many more - current links below. Bookmark and return please. Leave a comment if you wish.

Hello restaurant owners, and welcome back to Restaurant Trade Area Research - where I share over 30 years of insights from doing restaurant research - and, link to the latest of interest in the restaurant universe. Today I want to share with you the actual findings in a 3 store market about a decade ago.

While I won’t go into the extreme measures that need to be employed to have a VALID sample to begin with at a fast food restaurant (but you can find out more at my other information site www.squidoo.com/tradeareasurveys) - here are the results I want you to consider.

3 stores - $2,670,000 Sales (rounded)

customers that come 4+ times wk - 3% of trans - 80,000 in sales

2 or 3 times a week - 13% of trans - 348,000 sales

Once a week - 24% of trans - 642,000 in sales

Once every 2-3 weeks - 24% of trans - 642,000 in sales

Once a month - 12% of trans - 321,000 in sales

Once every 2or3 months - 9% of trans - 241,000 in sales

Once every 4to6 months - 1% of trans - 26,000 in sales

Less than every 6 months - 7% of trans - 187,000 in sales

First time users - 7% of trans - 187,000 in sales

You would be surprised how many owners DON’T think of their real customer base in this manner - what levels ACTUALLY provide the real dollars to a store. This weekend in this blog - I will expand on the data above. But, now, to today’s restaurant links - feel free to comment too.

Today’s Links

Fast Food Prices On The Rise

http://c13.zedo.com//ads2/f/341180/1/172/0/305001132/305001132/0/305/331/zz-V1-pop1217960041201.html?a=;l=;p= Video report too with story.

Healthy Fast Food For Kids A Tall Order

http://www.webmd.com/parenting/news/20080804/healthy-fast-food-for-kids-a-tall-order  This is a report issued by Center for Science in the Public Interest which rips a new opening for many restaurant brands. Detailed read with lots of interesting facts.

New Jobs In Fast Food

http://www.istockanalyst.com/article/viewiStockNews+articleid_2450358.html This article is about a company that provides your drive thru order taking with folks working out of their home.

Is a Fast Food BAN - Racist?

http://www.momlogic.com/2008/08/fast_food_banned_in_poor_areas.php#over1 After all, how can those fatties in Beverly Hills be helped?

Arby’s Signs Development Agreement For 41 New Stores In New York Metro Area Over 10 Years

http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080805006617&newsLang=en

Again, would love to read your comments. Thanks for stopping by - bookmark for more this weekend.