Budget-conscious consumers are impacting your restaurant, forcing you to rethink your real estate and marketing decisions. It's absolutely vital for restaurants to know their trade area – the geographical area from which it draws its customers. With higher gas prices, consumers are staying closer to home to shop and eat, and when they do get out, they are trying to do all of their shopping within one development to avoid driving all over town.
Restaurants that once had a 10-minute trade area when they initially opened stores, now has probably shrunk to a 5-7 minute trade area. To determine the precise trade area for a restaurant, many restaurants are turning to detailed data models based on customer profiles. These models allow businesses to understand what locations will be home run locations –restaurants, especially smaller chains, can no longer afford to open poor-performing locations. At this time it could be detrimental to their brand.
Direct mail efforts that once encompassed everyone within that 10-minute trade area should be modified. Think of how many customers you’re mailing to that are no longer driving to your door.
Consumers are no longer driving as far as they once did to eat out. Restaurant owners, now is the time to understand your trade area and what customers lie within that area for both real estate and marketing purposes.