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Strategies for Choosing Appropriate Locations for Each Kind of Food

Strategies for Choosing Appropriate Locations for Each Kind of Food

Restaurant and beverage businesses generally start based on two concepts. One, the food recipes or beverage formulas could confidently be said to be good enough and sellable, so a good location visited by the target customers of the food or beverage to be sold is sough. Two, there’s no food recipe or beverage formula, but there’s an interesting location, so food or beverages are sought to sell to target groups at the location. Most restaurants are started based on either of these concepts. Regardless of the principle, however, “location” plays an important role in the success of restaurant and beverage businesses.

So, what kind of business should you choose? Well, there’s no concrete formula saying this location or that location is the best. That’s because there’s more than just good or bad locations. You also need to consider also store concept, flavor, service and management. Nevertheless, some considerations such as the following can decrease risks and increase success opportunities:

The location should be appropriate for a restaurant or beverage business.
There are two main types of locations, namely, locations inside department stores and locations outside department stores. Locations inside department stores are sub-divided into three additional types as follows:
1. Department stores or large malls.
2. Hypermarkets or malls focused on selling retail consumer products.
3. Community malls or centers focused on selling outdoors without air conditioning.

On the other hand, locations outside department stores are divided into two main types, namely, locations near buildings and offices and locations near communities and residential areas.

Locations inside Department Stores VS Locations outside Department Stores

People might ask which is better between locations inside department stores and locations outside department stores. As stated earlier, every location has different strengths and weaknesses. The benefits of locations inside department stores are that they have more opportunities for traffic or people passing by than locations outside department stores. This is because department stores have magnets that attract people and offer all sorts of amenities, including parking spaces. However, locations inside department stores are about 20-30% more expensive than locations outside department stores. In addition, construction for locations inside department stores must follow store specifications, and monetary guarantee must be deposited at least in the hundreds of thousands. And that doesn’t even include the rather expensive monthly rent and lots of other minor conditions.

Meanwhile, locations outside department stores are cheaper whether in terms of construction or contract guarantees. However, these locations have to risk people’s traffic. In addition, if these locations are located in office districts, selling time will be limited to only during break times and after work hours. Even worse, sales will plummet during holidays. And another problem with locations outside department stores is parking and convenience in travelling to the store. These problems need to be thoroughly considered.

Meticulously Study the Location You Want in Person

Each location has its strengths and weaknesses and different customer groups, so before opening a restaurant at any location you need to study the details of the location, especially about the behaviors of the people in that location. For example, for a location inside a community, you should find out what kind of people stay in that community, the people’s spending behaviors, what time periods people like to eat at restaurants, what kinds of food are popular there, how many restaurants exist in the community, how much do meals cost on average per person, etc. You must know all of these pieces of information. How do you know them then? The answer is personally visit the location. Always remember that restaurants are investments, so you must pay attention to every detail, especially location. If you choose the wrong location from the start, you’re unlikely to reach the stars. Spend at least one or two days visiting the location, and list all the items that you need to study. Visit the popular restaurants in that location to gather some information.

Basic Location Information You Need to Know
• Average age-gender composition of the people in the community.
• The community type, e.g., new village, old village, condominium, apartment, etc.
• Occupations and work, e.g., students, office employees, civil servants.
• The movements of community inhabitants, e.g., most people leave to work outside the community.
• The spending periods throughout each day, e.g., fast-food in the morning, simple-and-quick lunches and relaxing dinners.
• The amount of people traffic at each period throughout the day.
• The average amount of money people spend per meal.
• The types and number of restaurant in the community.
• Nearby government facilities or landmarks.

All of these pieces of information are very important to the future of restaurant and beverage businesses. The more in-depth information you have about the location, the better you will be able to plan or create your restaurant concept appropriately and accurately for the behaviors of the people in that location. And when our restaurant is run with a concept that matches the target customer group, it won’t be hard to turn a profit.

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