Restaurant market research: a step-by-step method with sheets to fill in

How do you do market research for a restaurant?

Market research is not a school exercise. It helps you avoid three expensive mistakes: opening in a street where nobody walks in the evening, offering what the place next door already does better, or setting prices local customers will not pay.

Bpifrance Création, the French public website for founders, advises working from the general to the specific: understand the sector, then local data, then the ground. We follow that order, applied to a restaurant. This guide is part of our guide to opening a restaurant in France.

How do you define a restaurant’s catchment area?

The catchment area is where your customers come from. For a restaurant, it is not the same at lunch and dinner.

• Weekday lunch: customers mostly come on foot, from their office, school or a nearby shop. The area is measured in minutes of walking.
• Evenings and weekends: they come from further away, by car or public transport, if the place is worth the trip. The area grows.
• In a tourist area: some customers are passing through, so the season matters as much as the neighbourhood.

How to draw it

1. Print a map of the area and mark your address.
2. Draw the zone reachable in a few minutes on foot: that is your lunch area.
3. Draw a wider zone for the evening, taking parking and transport into account.
4. Mark what draws people: offices, schools, station, cinema, theatre, market, shopping area.
5. Mark what blocks them: a wide road that is hard to cross, an area that empties at night, no parking.

This annotated map becomes the first page of your research. It also lets your banker understand your location at a glance.

How do you get to know the customers in your area?

Two kinds of information work together: public figures and what you observe.

Free public sources (France)

Bpifrance Création recommends, among others:

• Insee, the national statistics office, with its “Statistiques locales” service: population, age, household income, by town and sometimes by neighbourhood;
• data.gouv.fr, the public open data platform;
• Bpifrance Création’s sector files, to understand the trade and its trends;
• the local chamber of commerce (CCI), which supports founders and knows local businesses;
• the town hall: development plans, new housing or offices, upcoming works that will change footfall.

Outside France, look for the equivalent: the national statistics office, the local council and the chamber of commerce.

What you observe on site

• Who walks down the street at lunchtime, late afternoon, evening and on Saturday?
• Are there offices? Roughly how many staff? Do they have a canteen or meal vouchers?
• Families, students, retired people? At what times?
• Which shops around are doing well? They tell you something about local spending power.
• Are nearby terraces full? When?

Write everything down, with the date and time. An observation is only useful if you know when it was made.

How do you analyse competing restaurants?

Your competitors are not only restaurants serving the same food. They are all the places where your customer can eat at the same moment, for the same budget: a bakery with a lunch deal, a sandwich shop, delivery, a staff canteen, another restaurant.

Step 1: on Google Maps

Search “restaurant” around your address and list every place in the area. For each one, note its rating, number of reviews, opening hours, prices (photos of the menu), what customers praise and what they complain about. The detailed method is in our guide to local competitor analysis on Google Maps.

Step 2: in person

Go for lunch or dinner at the main competitors on different days. Count covers, watch the waiting time, the likely average spend, the welcome.

The sheet to fill in

At the end, ask yourself one simple question: what is missing in this area, at what time of day, and at what price? The answer is the heart of your concept (see how to make your restaurant stand out).

How do you count footfall outside the address?

Counting footfall is the most useful data for a neighbourhood restaurant, and it costs nothing. It tells you how many potential customers walk past the door.

The method

1. Choose time slots: 11:45 to 13:30, 18:30 to 20:30, and Saturday.
2. Stand opposite the address and count pedestrians for 15 minutes in each slot.
3. Repeat on several days, including a rainy day if you can.
4. Do the same outside a competitor that is doing well, to compare.

Fictional example: 120 people counted in 15 minutes at lunchtime is about 480 an hour. It does not tell you how many will come in, but it lets you compare two addresses and check that an assumption of 35 lunch covers is not unreasonable.

Talking to potential customers

Ten short conversations are worth more than a long questionnaire. Three questions are enough:

1. Where do you usually have lunch (or dinner) around here, and how many times a week?
2. How much do you usually spend on that meal?
3. What is missing around here when it comes to eating out?

Ask them as people leave offices, at a market, or ask neighbouring shopkeepers, who know their customers well.

How do you turn the research into figures for the business plan?

Market research is there to back up two figures: covers per service and average spend. All your forecast sales follow from them.

Always keep a cautious assumption: Bpifrance Création advises keeping income low. Then carry these figures into your restaurant business plan to work out sales and break-even.

Warning signs

• The area is empty for one of the two services you plan to run.
• Three competitors already offer the same thing, well rated, at lower prices.
• The average spend you need to be profitable is higher than what the people you asked pay.
• A big works project will cut off the street for months.

A warning sign does not mean giving up. It means adjusting: another location, another format (more takeaway, a single service), another concept.

What if you are buying an existing restaurant?

When you buy a restaurant, the research also covers the restaurant itself. You have valuable data: the last few years’ accounts, real footfall and customer reviews.

• Read the Google reviews from the last two years: what customers love (keep it) and what they complain about (fix it).
• Compare the rating and number of reviews with competitors’.
• Ask for monthly sales to see the seasonality.
• Watch the dining room over several services before signing.

The full list of checks before buying is in our guide to buying a restaurant in France.

The restaurant owner’s guide

Open, run, grow: each stage has its full guide and detailed guides, with their reading time.

This guide for your trade

• Restaurants
• Bars
• Bakeries

Go further

• Opening a restaurant in France: the complete guide
• Restaurant business plan
• Local competitor analysis on Google Maps
• How to make your restaurant stand out
• Buying a restaurant in France