How to conduct a good restaurant market study

As with starting any business, opening a restaurant requires carrying out a thorough market study. But how do you go about this? What do you need to analyse, and where should you start? Here, we tell you everything you need to know.

Why do you need to do a market study for your restaurant?

Often overlooked, the market study is nevertheless crucial to the success of your restaurant project. By closely analysing the market, supply and demand, you can determine how realistic your idea is in the field, and confirm the feasibility of your project: is it the right type of restaurant? In the right location? Will customers show up?

Conducting market research allows you to identify potential obstacles, and pinpoint any strengths, weaknesses and areas for improvement. You will then be able to minimise risks and adjust your business model if need be.

The market study is also the bedrock of your business plan, helping you convince investors and potential partners of the viability of your restaurant business.

Carrying out a detailed market study for your restaurant

The four main steps in a restaurant market study are: 

  1. Market analysis
  2. Demand analysis
  3. Supply analysis
  4. Research on regulations and steps to be taken

1) Analysing the restaurant market

The first step is to analyse the trends in the restaurant sector and to gather statistics and other key figures: firstly, on a national scale (“macro-economic” analysis), and then locally in the catchment area under study (“micro-economic” analysis). 

Here are some examples of market data that can be collected:

  • How has the restaurant sector in France evolved in recent years?
  • How many restaurants open in France every year? How many close?
  • Is this a good time to open a restaurant? How has the health crisis affected the restaurant sector?
  • What new restaurant concepts are emerging?
  • Which sectors exist in the restaurant industry? What are their growth rates, sales volumes and market share? 
  • What is the average turnover of a franchised restaurant versus an independent restaurant?
  • What is the average restaurant expenditure per household in France?
  • What is the footfall in the area where you want to set up your restaurant? Is it well served by public transport? Is it a tourist destination?
  • What amenities and places of interest are located nearby (shopping centres, businesses, cinemas, beaches, etc.)?
  • What is the population of the target city? What socio-demographic factors should be acknowledged? 

This preliminary economic analysis will give you a very good understanding of the local market and the health of the restaurant sector.

The following resources can be useful for collecting this information:

  • Statistiques locales for obtaining figures on a specific geographical area
  • Sirene.fr for consulting a list of businesses in your business sector
  • The official website of the town or region where you want to set up your restaurant
  • INSEE 
  • Eurostat

2) Analysing local demand

The second step in conducting a restaurant market study is an analysis of the local customer base and demand. The primary objective here is to confirm that your restaurant will be able to meet a real need. This will also help you get to know your potential customers better, and adapt your offer to their expectations. 

To do this, you will need to carry out field research. Using questionnaires, surveys on social media, interviews and street surveys, try to gather as much information as possible about your customers. For example:

Take the time to compare this data and analyse it carefully. You can then develop a profile of your target customers – this is one of the key takeaways of the market study.

Since the habits and needs of your future customers will no longer hold any secrets, you can propose a menu, prices and services that are as close as possible to their expectations!

Good to know

When designing your questionnaire, try to use closed questions and multiple choice questions, rather than open questions.

3) Analysing local supply

Once you have analysed demand, you should analyse the competitive landscape. This stage of the restaurant market study is central for determining how you can stand out from the competition and define your competitive edge.

Particular attention should be paid to your direct competition (direct competitors are restaurants that offer a concept similar to yours in your catchment area).

But consider your indirect competition, too, i.e. all the restaurants located in the vicinity of your future premises, whatever their type (fast food outlets, bakeries, caterers, sandwich shops, etc.).

In general, you should study your competitors’:

  • Concept, positioning and target customers 
  • Dish quality
  • Menu prices: daily specials, breakfast, etc.
  • Demand, busy periods and off-peak hours
  • Brand reputation
  • Services offered (home delivery, hosting of events, sale of products, etc.)
  • Market share
  • Menus
  • Marketing strategy and channels (social media, billboard advertising, loyalty programmes, promotional offers, comparison sites, etc.)
  • Restaurant size and capacity (labour force, number of covers, revenues, surface area of the premises, etc.).

Identify your main direct competitors and ask yourself the following questions: do they pose a threat to your own restaurant? Why are they successful? What are their strengths and weaknesses? What are their main challenges (regulatory constraints, staff recruitment, suppliers, falling demand, etc.)? Is the market saturated? 

The most effective way to familiarise yourself with the local competitive environment is simply to go and have lunch in restaurants with a similar concept to yours. Do not be shy in talking to customers, restaurant owners, staff, and so on. 

This in-depth analysis will be enlightening: with the information gleaned, you will understand the good and bad practices, threats and risks, as well as any opportunities that can be seized. You can then fine-tune your concept to successfully stand out from other local restaurants.

Good to know

There is a difference between quantitative research and qualitative research. If you want to open a restaurant offering a particularly innovative concept, favour qualitative research: question fewer people, but gather more detailed information through phone interviews, question and answer sessions, and longer, more attentive discussions.

4) Find out about the regulations in force

The final step in the market study is to find out about the regulations in force and the administrative procedures to be followed. 

In particular, you should research:

  • Procedures for obtaining a licence and operating permit
  • Choice of business structure (limited company, single shareholder, micro-entrepreneur, franchisee or sole proprietorship, etc.)
  • Tax regime governing the restaurant industry (tax system, taxes, etc.)
  • Training and qualifications required
  • Financial assistance available
  • Hygiene standards
  • Safety standards
  • Accessibility standards
  • Regulatory signage (prices, origin of meat, licences, etc.)
  • Draft laws and future reforms concerning the restaurant sector.

Organisations such as the CCI (Chamber of Commerce and Industry)or BPIFrancecan help with these steps.

Once you have carried out your market study, you will be able to determine whether your restaurant project is viable, or if you need to adjust your business model. 

If you are still convinced of the potential of your future restaurant, you can move on to the next step: writing your business plan and forecasting revenues. 

Note that conducting a restaurant market study will also be beneficial if you are considering taking over a restaurant. To find out more, read our article: "The complete guide to taking over a restaurant." 

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