Tight Restaurant Market

As of 2003 there was one restaurant for every 664 people in America. Consider that 30 years ago there was one restaurant for every 1,029 people, according to the National Restaurant Association. That's a big increase.

With the proliferation of fast-casual and Bar and Grill places, there is more choice (and clutter) for consumers, and more competition for share of wallet for owners.

Now, maybe more than ever, two things stand out clearly:

1. Consumers can be choosy. You need them and they know it. Poor customer service is always a knock-out factor, but today nothing short of a WOW experience can compete. Knowing the owner, being treated special, is a critical factor in choosing where to eat.

2. Advertising clutter is off the charts. Coupons, mailers, billboards, cable ads - everyone is fighting to be heard. Local Store Marketing and word of mouth are more relevant than ever.

Combine this glut of restaurants with the current economic environment. High gasoline and fuel prices coupled with rising food costs (everything from milk and dairy to chicken, pork, and beef) are conspiring to keep more people at home. People are not cutting back on gasoline, they're cutting back elsewhere.

Frequency of visit has always been a decent measure of unit health and this summer many restaurants are feeling that pinch. Fewer meals being eaten out makes the competition for each visit more fierce.

Hope lies in the basics. Rather than faceless advertising, small businesses can solidify relationships with their complementary audiences and win them over, one at a time.

Knowing the owner gives the consumer a stake in the business. We recommend businesses where we know the owner, we patronize our neighbors because we're all in it together.

Make sure the customer experience in your store is top-notch, get out into the community to forge and strengthen relationships, and focus on your 7 Core Competencies to maintain a high frequency of message and you have a chance to maintain a high frequency of visit.

It's that or hold on until consumers are more confident.