Challenging Restaurant Market Leads Many to Consider Sale

Challenging Restaurant Market Leads Many to Consider Sale

Nation’s Restaurant News predicted 2017 would be a notable year for restaurant mergers and acquisitions.

While restaurant stock prices have started to gain momentum, valuations have declined, making many companies more appealing for buyers. The recent acquisition of restaurants like Cheddar’s Scratch Kitchen, Popeyes and Bob Evans, to name a few, are only validating this trend.

Competition in the restaurant space is fierce, and changing consumer taste preferences are creating more challenges for those trying to adapt. The current environment may present opportunity for owners considering a sale.

Here are a few things to keep in mind whether you’re ready to put your restaurant on the market or seeking new ways to drive growth without a sale.

Ready to sell?

If you are considering selling your restaurant now, or maybe in the future, creating an attractive target for buyers is priority number one.

Conducting your own due diligence before bringing buyers to the table will save you a lot of time and angst. While buyers will do this on their own, it can make the process smoother if you are prepared for any surprises that may come from evaluation of your financials, restaurant management and marketing strategy.

One way you can set yourself apart from other candidates is by leveraging analytics in your due diligence. Analytics can help you communicate your restaurant’s growth potential through a deeper understanding of factors such as:

  • Market saturation. Uncover any limitations that may exist in your market and areas of opportunity for future penetration.
  • Customer demand. Leverage customer segmentation insights to identify who your best customers are and their lifestyles and buying habits, helping your better position your restaurant to reach more of your core customers.
  • Market potential. Identify if your concept is scalable for expansion regionally or nationally, and which markets show the greatest opportunity for growth.

Not ready to sell your restaurant – but, seeking growth opportunities?

Even in this challenging restaurant environment, there are still plenty of opportunities outside of acquisition that restaurant owners can leverage to drive growth using analytics:

  • Infill existing markets. Maximize existing markets to take advantage of cost efficiencies in distribution and marketing.
  • Rightsize for your market. Optimize your position in each of your markets and ensure each of your units is in the best location to reach your best customers.
  • Optimize individual restaurant performance. You’ve invested time to ensure each unit is in the right location; maximize your capital investment by deploying resources to the right locations to help them reach their potential.
  • Promote local store marketing. Local store marketing can help you target customers around each of your locations with tailored messaging, reach nearby competitors’ customers and leverage local events to drive new foot traffic.

Want to learn more about the growth opportunities available for restaurants? View Buxton’s webinar “Turning Analytics into Action, Maximizing Capital Investment,” to learn how analytics can help.