5 Steps to Complete a Restaurant Competitive Analysis

If you want to run a successful hospitality business, there's a lot you can learn from your competitors. In order to avoid being left behind in a constantly evolving industry, you need to be aware of what your competitors are doing well.

This is why a restaurant competitive analysis is a powerful tool. It allows you to comprehensively understand what your competitors are doing differently to you. You'll see where you're falling behind and the major opportunities you can capitalise on.

In our complete guide, we'll share how to conduct an effective restaurant competitive analysis, and the best ways to put it into practice in your business.

What is a restaurant competitive analysis?

A restaurant competitive analysis is a comprehensive deep-dive into your hospitality competitors. Typically, you'd present a competitor analysis as a simple written document.

A competitive analysis could form a part of a large, formal document, like a restaurant business plan. Or, it could be a more ad-hoc analysis for internal use only. The most important thing is the insights you can gain from your competitive analysis.

The major goals of a competitive analysis are to understand what your competitors are doing better than you, and the gaps or weaknesses you can take advantage of. It's also the perfect time to analyse your business and how you stack up.

How to conduct a restaurant competitive analysis in 5 steps

Here are the five steps you need to take for a successful competitive analysis:

1. Analyse your own business

To effectively compare your restaurant to your competitors, you need to make sure you understand your business inside and out. It's the perfect opportunity to conduct a fresh breakdown of your own restaurant.

At this early stage, you should define the key areas of your competitors you'll be analysing. Then, you need to analyse your own performance in these areas.

This can vary depending on your specific circumstances, but we recommend looking at the following areas:

• Business model.
• Unique selling points (USPs).
• Menu.
• Online presence.
• Reviews.
• Marketing and promotions.

Here are some methods to help you better understand how you're performing in these areas:

• Booking and sales data: Booking data, which you can acquire and own through ResDiary, helps you understand the overall performance of your business, how many reservations you take vs walk-ins, and much more. With tools like AccessEPoS and PowerEPOS by Triniteq, you get high-quality sales data on top of reliable point of sale functionality. Together, this data can form the backbone of your self-analysis.
  
  
• Analytics: ResDiary's analytics suite is the perfect way to get an in-depth view into how your restaurant is performing. You can understand your sales over time, your busiest periods, your best sellers, and more. For more information, check out our complete guide to restaurant analytics.
  
  
• Customer feedback: Your customers are the foundation of your financial stability. One of the most powerful ways you can improve your understanding of your restaurant is through customer feedback. ResDiary makes it easy to acquire customer feedback with our email marketing features. You can set emails to automatically trigger when a customer dines with you. This is a great way to get more online reviews, or feedback purely for internal use.

SWOT analysis

One of the most comprehensive ways you can analyse your business is through a SWOT analysis. SWOT stands for:

• Strengths: The things your business is currently doing well.
• Weaknesses: The areas where your business could improve.
• Opportunities: Chances that your business can seize to perform better and earn more revenue.
• Threats: External forces that could negatively impact your business.

By analysing these four areas, you can get a wide-ranging view into how your business is performing. SWOT analyses can be lengthy documents that paint a clear picture of the position your business is in. Some areas a SWOT analysis might identify include:

• Strengths: A well-performing menu, well-trained team, and great location.
• Weaknesses: Cleanliness, online marketing, and performance on slow days.
• Opportunities: Catering to more diets, increasing numbers of commuters, and selling take-home products like sauces.
• Threats: New nearby competitors, a faltering economy, and the popularity of a new food delivery app.

2. Define and analyse your competitors

Now that you know exactly what's going on in your business, you must gain a better understanding of your competitors.

Chances are you don't have the time to analyse every single business that could be defined as a competitor to yours. You'll need to select a smaller number of restaurants to look at.

However, you should ideally select a useful cross-section of competitors so your analysis is comprehensive. This means finding different kinds of competitors to compare your business with.

One important way to classify your competitors is direct and indirect competitors. Direct competitors are competitors with an offering that is very similar to your own. These businesses might share your primary cuisine and target market while being located nearby your venue.

On the other hand, indirect competitors have less in common with your business, but share your target market. For example, if there are a lot of offices near your restaurant, you might find yourself competing for lunch time business with a wide array of different restaurants.

When selecting competitors, you’ll naturally want to look at businesses that are doing well. However, you can also learn a lot from competitors that may be struggling in certain areas.

Once you've chosen a number of competitors to look at, you're ready to begin your analysis. A great starting point is to create competitor SWOT analyses. Identify the strengths, weaknesses, opportunities, and threats for your competitors, and compare the results to your own SWOT analysis.

This can lead to some swift, valuable discoveries. For instance, if many of your competitors share a strength that is a weakness in your business, you should move it to the top of your priority list.

Some other aspects of your competitors' businesses you should analyse are:

Analyse their business model

A defining characteristic of any business is its model. This determines how exactly a business operates. Examples of different business models restaurants may have are:

• Multi-venue business models such as restaurant groups and restaurant chains.
• Relying on diverse income streams such as restaurant vouchers and take-home products.
• Hosting private events or offering venue hire for functions.

By analysing the ways in which your competitors are operating, you can see what's working for them, and concepts that you can emulate in your own business.

When looking to emulate business models of your competitors, ResDiary can help you in a number of different ways. We have a range of features designed specifically for restaurant groups.

This makes it far simpler for you to operate across multiple different venues. ResDiary's cloud-based platform functions seamlessly across your locations. You'll have central oversight of all your booking data, allowing you to make the right decisions for your business.

ResDiary's white-label solutions including email marketing and booking widgets work extremely well across your venues. It's easy to roll out these solutions around your locations to maximise their effectiveness.

Plus, with ResDiary' Cross-Sell Widget, you can take full advantage of a multi-venue business model. When a customer tries to place a booking at one of your venues, but their preferred time isn't available, you can use the Cross-Sell Widget to offer them that same time at another of your venues. It's the perfect way to fully leverage a multi-site business.

ResDiary also empowers your business to sell vouchers with our Stripe integration. This can be a great way to get more upfront revenue for your restaurant and offer something different for your customers.

If you want to emulate your competitors in terms of hosting events, ResDiary can help out with that, too. We have a range of event enquiry features, and allow you to promote your events with widgets on your website.

We make it easy to add extra space into your booking diary for limited periods with our segments feature. You can save your segments and switch back to your regular diary at will.

Analyse their unique selling points (USPs)

To understand a business you're competing with, you need to understand what makes it different. That's where unique selling points (USPs) come in.

USPs are the reasons to visit a restaurant over any other. They define the specific experience you can expect at that venue.

By understanding your competitor's USPs, you'll see the reasons why customers might be overlooking your venue and checking theirs out, instead.

Some USPs a restaurant might have include:

• A highly authentic approach to a particular cuisine.
• A specific focus on catering to dietary requirements such as veganism.
• Particular restaurant features such as live music.

By assessing the USPs of your competitors, you can identify whether you have established enough of a point of difference in your venue. Or, you might find you have more work to do in this area.

If you want more strongly-defined USPs in your business, you should focus more closely on your branding. Your brand is a crucial point of differentiation for your restaurant and the perfect way to show off your USPs.

For example, if your restaurant focuses on a particular style of cuisine, you can incorporate appropriate cultural imagery into your branding. This allows you to consistently highlight what makes your business different every time customers interact with your business.

ResDiary offers a range of ways to clearly showcase your brand to your customers. Our email marketing features allow you to easily brand your communications with customers. We also make it easy to create branded widgets for your website.

With ResDiary, you're empowered to incorporate your restaurant's brand during a customer's entire booking journey, from your website to follow-up communications. This ensures your USPs stick in their mind, encouraging repeat business.

Analyse their menu

The backbone of any restaurant is the food and drinks that it serves. To understand how you stack up against your competitors, you need to look at their menus.

Some important areas to consider when looking at a competitor's menu are:

• Dishes: Most importantly, what's actually present on your competitor's’ menus? How much variety is there, which cuisines are represented, and which dietary restrictions are catered to? This can provide excellent insight to how your menu can be improved.
  
  
• Customer favourites: Which dishes stand out at signature menu items, and which dishes get the most traction on social media? These are the most important items for you to analyse, as they could spark your next great creation.
  
  
• Pricing: Menu pricing is one of the most important aspects of a venue's finances. It determines the revenue generated from food and drinks sold in your venue. Menu pricing plays a major role in how a restaurant is perceived, with higher prices giving a restaurant a more premium feel. Through your competitive analysis, you may realise you should raise your prices, or you might identify opportunities to undercut your competition. For more information, check out our complete guide to menu pricing strategies.
  
  

Analyse their online presence

A restaurant's online presence plays a key role in its discoverability. Our Beyond the Booking industry reports, state that 36% of diners rely on social media to find restaurants and 20% rely on search engines in Australia and New Zealand.

In the UK and Ireland, 28% of diners rely on social media and 33% of diners rely on search engines. This shows just how important it is to gain the attention of your customers in the digital realm.

One of the most important aspects of a restaurant's online presence is its website. By looking at competitor websites, you might discover new ways that they are attracting more diners and driving more effective reservations. For more information, check out our complete guide to restaurant website design.

Look for telltale signs of a restaurant search engine optimisation (SEO) strategy, such as the use of relevant keywords and an in-depth blog. If your competitors are investing in SEO, you might want to consider doing the same.

You might also find your competitors are seeing success on social media. If they have a high number of followers and are investing a lot of time in their profiles, consider how you can broaden your social media presence.

If you want to get great results from SEO and social media strategies, ResDiary has the integrations to help. Our Reserve with Google integration allows customers to place bookings from Google Search results. Similarly, our Meta integration allows customers to place bookings directly from your Facebook and Instagram profiles.

Plus, our website widgets make it easy to drive more reservations with attractive, stand-out designs.

Are your competitors leveraging third-party booking apps? Catch up or get ahead with ResDiary's partnerships with DesignMyNight, Quandoo, and Restaurant Hub integration, granting you visibility to millions of hungry diners.

Once you've decided to level up your online presence, ResDiary has the tools you need to maximise the effectiveness of your strategy.

Analyse their reviews

While you're taking the time to explore the online presence of your competitors, take some time to look at your competitors’ online reviews. How are their scores on Google and other prominent platforms?

Reviews are vital sources of feedback which you can compare to how your customers feel about your business. Are your competitors getting praised for great service and ambience, while customers criticise yours? This should become a major focus area for your business.

Plus, be sure to check if your top competitors are receiving high numbers of 5-star reviews. These reviews can be key decision drivers for customers. In addition, great Google reviews can impact SEO performance.

When enacting insights from your competitor analysis, you may want to focus more closely on reviews in your business. ResDiary can empower you to do this with automated follow-up emails. If you want to boost your online reviews, you can simply add a link to these emails and ask customers to leave their thoughts.

Analyse their marketing and promotions

In addition to your competitors' online presence, how else are they marketing their business? For example, a competitor may have a mailing list you can sign up for to analyse their email marketing. You could also investigate their use of SMS marketing.

ResDiary enables you to match these kinds of marketing strategies used by your competitors. Through our built-in email marketing functionality and SMS marketing integration Silverstreet, you can remain in consistent contact with your diners.

Your communications can be branded to reflect the unique selling points of your business, and can be automated to ensure scalability.

Another important area to investigate is promotions and events that your competitors are running. From special menu nights to live music, these events can be instrumental in growing a customer base and establishing a business as part of a community.

If your competitors are placing a strong emphasis on events and promotions, consider doing the same in your business. ResDiary is an excellent choice to help you achieve this.

Through ResDiary promotions, you can easily create and market set menus or other special attractions. Customers can even sign up for these promotions with special widgets on your website.

ResDiary also offers a range of event management features. Our comprehensive booking features work perfectly for special events. You can manage pre-orders and pre-payments through Stripe and use our Tonic integration to manage ticketing.

3. Combat weaknesses in your business

Once you've completed the process of analysing your competitors, you should be left with a clear list of areas where your business can improve. This could range from:

• Menu pricing.
• Marketing strategies.
• Poor service.
• A lack of strong branding and points of differentiation.
• Online review scores.
• Hosting events more frequently.

Rather than being disheartened by areas where your competitors may be outperforming you, you should view this as a golden opportunity to close the gap with other restaurants and see growth in your business.

Sit down with your restaurant's decision-making team and prioritise the most important areas where you need to improve, and create your action plan.

4. Identify market gaps

On top of finding out where your business may be falling short, a restaurant competitor analysis will also help you identify market gaps among your competitors. These are the opportunities your competitors are missing out on.

After you've conducted your research, you'll be in the prime position to take advantage of these market gaps. These gaps might include:

• A particular marketing channel, like social media, that your competitors aren't effectively leveraging.
• A lack of affordable options in a market dominated by more premium, high-ticket competitors.
• A particular type of diet that is not effectively catered to among your competitors.

By both addressing your business' weaknesses and market gaps off the back of your competitor analysis, you can see some swift and impactful improvements.

5. Optimise your business

Whether you're seeking to iron out weaknesses or leverage key market opportunities, ResDiary has the tools you need to streamline and improve your business. Some of the ways ResDiary can help action the findings of your restaurant competitive analysis are:

• Improved booking management: With tools like ResDiary, reservation management and daily operations become vastly simplified. You can automatically control your flow of bookings and allow your entire team to access a wealth of reservation data. This allows you to improve your business in a number of different ways.
  
  
• Altering your business model: Need to make some fundamental changes to your business? ResDiary is built to support restaurant groups with a range of features to support multi-site businesses. We also empower you to expand your range of offerings with products like restaurant vouchers through our Stripe integration.
  
  
• Marketing features and integrations: If you're keen to catch up with the marketing efforts of your competitors, ResDiary can be a major help in this area, too. From our built-in email marketing features to SMS messaging through our Silverstreet integration, we offer a range of tools to help you attract more customers.

ResDiary is the key component you need to level up your business. For more information, check out our comprehensive guide to how ResDiary can help grow your restaurant.

Make your restaurant more competitive with ResDiary

ResDiary is the reservation management system to help you catch and exceed your competition. From high-quality booking software to an array of powerful integrations, you'll have everything you need to gain a competitive advantage.

Access the tech stack you need to elevate your business and stand out.

Book a ResDiary demo today to help take your business to the next level.