Restaurant Trade Area Research

17. July 2008

Cannibalization of Customers

Filed under: Starbucks, cannibalization, new products, Trade Area, Quantitative Research — Rick Phillips @ 08:13

Of course, one of the main reasons to do on-site research at your restaurant is when you decide to build a new unit in your same market. Obviously, you don’t want to build a new location in a likely spot that is within your existing stores main trade area. This is when you need to conduct a Trade Area Survey at your restaurant that includes a `cannibalization question’ for your customer base.

The exact wording of  the cannibalization question is of vital importance to the accuracy of the data your interviewer will gather (or is this going to be YOU speaking with your customers). Since I have written questionnaires that were used in 100’s of cannibalization studies - I know that answer for you. You can find more at www.squidoo.com/tradeareasurveys .

Today’s Link

Starbucks Introduces New Drinks

http://www.slashfood.com/2008/07/15/starbucks-new-vivanno-nourishing-blend/?icid=200100397×1205764383x1200288208

New `food’ choices (or a new menu) are real reasons for returning to a restaurant - another reason to introduce a new product is to jump on a trend or stifle a competitor. Seems to fit with the `new’ Starbucks of 2008.

 

15. July 2008

Doing Fast Food Trade Area Surveys

I once pulled into a fast food restaurant in Tennessee off I-75, and, was going thru the drive-thru, when, after the speaker, I encountered a smiling young lady doing `surveys’. Being a marketing researcher who has conducted thousands of similar surveys and also who has trained hundreds to do the same - this was the big moment - a validation of what I did. But, after my answer to the first question (the coming from question) I was asked to move ahead to the window (my answer was that I had traveled from KY on a vacation). Knowing that they would want more info than that - I asked what the survey was about - she indicated it was about a new store that would be north of this one, also on a I-75 exit (I would have passed this first). I said, don’t you want to ask me more questions - “no, I can fill it out myself”.

Unfortunately, it’s very unlikely this interviewer was doing her job and certainly there were more questions about an attrition situation — which is of vital importance to the operator of the exisiting unit in question. And, while this level of `research’ is not usual, and also is WORTH NOTHING, it often represents a fair portion of the data (using interviewers not trained or supervised upon beginning real interviewing). As you know, as an owner of a restaurant — millions may ride on the outcome of `cannibalization’ surveys - if done at multiple units in a market.

Having the highest level of data collection is of utmost importance to expansion within a trade market - a service I provide - read more about trade area surveys at www.squidoo.com/tradeareasurveys .

Today’s Links

1. http://money.cnn.com/news/newsfeeds/articles/apwire/e6edbb1117015e037cd739ba89205815.htm

DineEquity Inc releases 2Q sales for same stores - shows IHOP up, Applebee’s down. Quick read.

2.

http://www.bizjournals.com/triangle/stories/2008/06/23/daily27.html

Olive Garden has same store increase, not as good for others in company.

3. http://www.streetinsider.com/IPOs/Dave+&+Busters+Holdings+(DANB)+Files+$170M+IPO/3816999.html

Dave and Busters files IPO. We have D&B in Atlanta - the evolution of this concept has been well executed. The TV ads of the combo food and fun price were well positioned. FUN sells.

4 - LINK OF THE DAY — “TGI FRIDAY’S” Research study. - http://www.chainleader.com/article/CA6578744.html?industryid=47553

Wonderful research study showing the benefits of research and customer satisfaction - and, what attributes to focus on to achieve that result. Free food, of course - but much more. A great marketing article.

12. July 2008

Don’t `Idle’ Your Drive Thru Traffic or it Will Go Away!

Hello store owners and corporate restaurant folk - welcome to the Saturday edition of Restaurant Trade Area Research - the restaurant blog of Rick Phillips  - a market researcher with over three decades of real fast food customer research at the street level (in the stores).

Today’s topic - drive thru operations. —- Over the years, many attributes have been associated with drivers/customers experiences while waiting to purchase your product without leaving their comfort cage (the car). But only one attribute will almost immediately turn away a customer if they have any alternatives for food - the long line before the speaker. Only with previous good experiences with the restaurant at the drive thru (with long lines), will maintain the customer in line for today.

With the drive thru often contributing over 50% in sales - this is not a lecture on the need for speed. And, indeed, many issues related to drive-thru’s will be explored in future postings. So, what this post is imploring in all operators minds is the new reality of 4.00 gas - to the point that the operator realizes that `while idling’ the customer is probably having this thought `what a waste’ (of money, more than time).

Marginal customers to the fast food customer base may be weakened more than usual by drive thru delays - especially those in SUV’s (if you get what I mean). So, this is more a time than ever to get your best crew on the window - don’t idle your drive-thru traffic away.

Now, onto today’s links.

Today’s Restaurant links (July 12th 2008)

Second Q Wendy’s Sales Up

Link - http://www.bizjournals.com/wichita/stories/2008/07/07/daily32.html

Up over 1% at franchisee locations - up at company stores too - after a down first Q.      RTAR - rating - 8 - Being from Ohio many years ago; yeah for Wendy’s. Perhaps the `choice’ of sides attribute helps.

 

Ruby Tuesday’s Same Store Sales Off for 4th Q

Down over 5% at both company and franchised units this Q. That said, many indicators look good according to the two minute article with quotes from the founder. >>>>>>>>>> RTAR  rating - 5 - No one likes sales to fall significantly at a signature national restaurant (could it be those who loved the German Potato Salad?) - that said, much is sited in the article of importance including the satisfaction scores. So; is it a shrinking total trade area? (Trade area research on stores with prior existing studies done at the store level reveals this information. Indeed, this is the exact information I’ve given to clients on repeats within their markets.) Or, just the competitiveness for the discretionary dollar?

 

Green Fast Food - Really Here or a Green Dream

Link: http://www.socialfunds.com/news/article.cgi/2529.html  This article is about a 4 minute read. It rehashs alot of the grist of what the environmenalists want out of companies and fast food restaurants inparticular. Styrofoam is the big meanie. However, several hundred have committed to a more aggressive program - this could be for you if you live in a highly committed `green community’ and could aid store usage by limited few - hippy, yuppie, and student oriented trade areas come to mind.     >>>>>>>> RTAR rating - 6 - Just make sure you aren’t the LAST to do this if you are in one of the above stated communities. But, wait, do `environmentalists’ comprise a worthwhile worry or significant market for FF restaurants - not yet. Lastly, however, remember the Karma factor.

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