CASE STUDY
Avoiding cannibalisation – strategic expansion of a restaurant chain
Restaurant Market Research Services
Restaurant Market Research Services
Our client is a casual dining chain with sites spread nationally. They offer both eat in and take away options.
Our client was planning to open five new locations in high-footfall urban areas. While expansion was a priority, the leadership team raised concerns about potential cannibalisation. This is where new restaurants could divert traffic from existing nearby restaurants, impacting overall profitability.
To gather evidence to calculate the potential value of opening new restaurants in new locations, our client engaged us to conduct surveys and provide consumer insight. We provide services such as reporting on the appeal of new restaurants to the local population and potential customer base. On this occasion, a Location Qualification Service, also known as a cannibalisation risk assessment, was an important part of the project.
This market research service uses a combination of quantitative research and qualitative research methods to quantify the potential impact on visits and sales, for both in-person sales as well as online.
1. Catchment Area Mapping & Footfall Analysis for potential location number one.
We mapped current customer catchment zones for the existing branch near the proposed new site. This allowed us to understand:
2. Localised Surveys
We used our TREADS system to calibrate potential customer data (footfall). This enabled us to categorise visitors to the local area. For example, tourists would not have the same potential value to our client as residents or students. Therefore, each category of visitor to the area needed to be valued separately. We also used our brand behaviour index to analyse the local catchment population.
Face to face surveys were carried out. The data from these surveys were combined with online sales for the agreed geographical catchment area.
3. In-Depth Interviews with Frequent Diners
Qualitative interviews with loyalty card members revealed deeper motivations: some diners valued convenience, while others had a strong connection to their “home” branch.
The Outcome:
The study identified a low cannibalisation risk to the existing branch. As part of this project, we also calculated anticipated weekly customer numbers for the client to use within their calculations and subsequent decision on whether to purchase the potential restaurant site.
The data led our client to continue with the purchase of the new site.
If you would like to find out more about our restaurant market research services, please get in touch.