Restaurant Trade Area Research

Just last month in this post http://restauranttradearearesearch.com/2008/08/02/perfect-demographics-perfect-traffic-counts-closed-restaurant/ I talked about the closing of a Backyard Burgers location at the intersection of Sandy Plains Rd and Hwy 92; and now, sadly - more fast food locations have bitten the dust nearby further `up’ (west) on Hwy 92 nearer to Woodstock.

Both went down about the same time last month - a 15 plus years open KFC; and a Zaxby’s which had been open several years. The KFC was in the midst of many fast food competitors - across the street from McDonald’s and Mrs Winners (Fried Chicken) with Capt’.D’s, Dairy Queen, Burger King and Chick Fil-A within eyesight; in addition to other restaurants within a mile such as Arby’s, Subway, Taco Bell, Wendy’s, Checkers and several sit downs such as Ruby Tuesday and O’Charley’s, Po Folks and several long time non brand restaurant choices. Yes, this was and is a developed area.

But, things change, - the Walmart across from KFC moved 2 miles up the road a few years ago replaced by a 4 day a week furniture wholesaler. The drugstore within the KFC retail pad went empty last month — the same retail pad saw a long standing BBQ location Slopes fold  about a year ago.

Our family used the KFC about once a month; usually for dinner - nearly always thru the drive-thru. Usually for the `dinners’ for 2.99-3.99 - buy three of those and you really felt like you got a sackful. Somehow, the drive-thru never backed up.

So, now, the nearest KFC is about 3.7 miles away, (this was about 2.1) and on our way back from Atlanta up Hwy 5. So, instead of using that one twice in last 5 years — I’ll probably bump into the once every six month category - and also eat at  Mrs Winners more often. Reverse attrition to the survivors.

I wonder if the KFC on Canton Rd will `market’ to the closed KFC’s trade area - I wonder if they have done any trade area surveys - to know that info?

The Zaxby’s closing was equally as surprising and it also was a place our family went to about once every 6 week or so. It was located about 3 miles from our home and we used it for evening eat-in meals (you only deal with Zaxby’s drive thru once) - it had good quality. It was NOT located in a highly concentrated fast food strip but did have local competitors. Indeed, a new chain Kayson’s, opened and shortly after the Zaxby’s was history.

The point of this posting is that the competitive environment is tough and getting tougher. Knowing your local trade area via real marketing research is not a luxury anymore. Indeed, if you do your whole market with a MarketView — you may know which `available’ fast food locations fit your market development plan without overlapping your own existing stores penetration. You will be able to do your own `attrition’ estimates based on trade areas.

Please visit www.squidoo.com/tradeareasurveys for more information about how I can help your marketing decisions.

Today’s Restaurant Links

Krystal’s Offers Up `Sonic-like’ Positioning

http://www.prweb.com/releases/2008/09/prweb1289284.htm  Is this `the idea’ that could make Krystal a player?

`Local Restaurant Dishes Out Manners’

http://www.kcsg.com/news/regional/28032164.html  `The Cell-Phone’ reminder. Quick read. Find out who is using `the reminder’.

`California Moves Closer To NYC-Like Menu Law’

http://www.desertdispatch.com/opinion/state_4250___article.html/mandate_menu.html 

`Fast Food Outlaws’

http://www.smh.com.au/news/world/fastfood-outlaws/2008/09/06/1220121599393.html  A less than flattering look at the USA from our friends down-under.

`Changing Lifestyles and Rising Incomes To Affect Restaurant Sales’

http://www.prweb.com/releases/restaurants_pizza/fast_foods_dining/prweb1302024.htm

The above story is about the GLOBAL MARKET and not the changing lifestyles here in America (less eating out, trading down). Nevertheless an in-depth viewpoint to read.

At the corner of Sandy Plains Road and Hwy 92 in North Atlanta you will find a Back Yard Burgers that has gone out of business. Most likely the owners did their due diligence and checked out the basics like traffic counts and the demographic profile of the area. Not only that, I bet what they found sounded perfect for the Back Yard Burgers positioning as an upscale hamburger restaurant. Indeed, the intersection has huge amounts of traffic and the demographics of the area would indicate `families’, plenty of roof tops, and plenty of income.  That said, the fact that a Checkers went out of business at the corner on the opposite side of the street - could have indicated that the location be viewed with caution. (The Checkers challenged an existing McDonald’s. The corner is now home to an Italian sit down restaurant.)

So, what happened? Personally, since I was a VERY light user (3 times in perhaps 3 years) I can’t speak to operations of the unit - but the experiences of my 3 in-store visits went very well. No negatives. So, assuming it wasn’t an operation problem - what gives?

What gives is that you need MORE than perfect demos and traffic counts; you need to understand the real market potential of an intersection. And, the real traffic flows for `your side of the street’.

First off, before you think the intersection was `too busy’ and had huge back-up’s of traffic that no one would want to get `re-involved’ with after visiting the restaurant - forget that. This is a well flowing traffic pattern. That said, most restaurant owners are aware that some intersections are `too busy’ and don’t make a `good spot’ sometimes.

No, it wasn’t that at all. The problem with the traffic counts in this instance was that most of it was `long - flow traffic’ — most of it going miles beyond that intersection as a final destination. Additionally, the location had difficult access due to raised cement in the median - bad access especially can limit great lunch numbers; and females.

Additionally, the trade area likely did not have good daytime worker demographics - as one would assume the `hamburgers’ skews male in positioning - and, likely, not even a strong daytime worker number compared to other intersections with less traffic.

Finally, another word about demographics — a given stores demo’s will almost NEVER fit the demo’s for a 1-3-5 mile area. Most restaurants need to know what subgroups are likely to be important (those with higher indexes) to a normal store like theirs. IF you have a restaurant that features 1/3 lb. burgers — you might want to know the indexing of males within the real trade area. (The real trade area of this store was probably ONLY Sandy Plains Rd. and probably mostly on their side of the traffic flow within 2 miles before Wigley Rd. — NOT a big real trade area.)

But, finally, the real story in this instance - was probably the competitive environment. A Five Guys opened in the direct competitive area, probably cutting off and being `first’ to a large part of Back Yard Burgers lunch traffic and even dinner traffic - and in a more accessible (in and out) location. Splitting the hamburger business with McDonald’s was one thing - 3 way splits - can close a marginal restaurant with poor access to traffic flow.

Looking over potential sites - is a service I’ve provided - find out more about my Trade Area services at www.squidoo.com/tradearearesearch

Today’s Links

Woman Wants To Limit Fast Food Restaurants

http://www.todaystmj4.com/news/local/26152264.html Now that laws have started by activists to limit fast food locations - expect to see your local do gooder getting more and more exposure for such thinking. This is a story about a neighborhood group that says 6 fast foods on a road are enough - too bad for the Church’s Chicken.

Jake Says `Don’t Use The Drive-Thru’

http://poststar.com/wordpress/?p=5836&cat=47    Seeing the miles at zero while sitting at the drive-thru; will bring out the Greens.

The EAT IN Lunch User

http://www.chainleader.com/article/CA6581159.html?industryid=47557 Quarterly survey by Quick - Track; real research and real numbers.