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Competitive analysis helps you understand what makes your restaurant different than the restaurants that are similar to yours. It’s also a great way to get ideas for marketing or offerings you could incorporate at your restaurant.

With a competitive analysis, you can gain actionable insights into how other restaurants are performing – what they’re good at and what they’re strong at. You can use this information to make creative changes to your restaurant that are in line with customers’ changing needs.

Step 1: Know Who Your Competitors Are

It may sound obvious, but the first thing you’ll need to understand is what restaurants are your true competitors. What do I mean by that?

A competitor is a restaurant that is similar to yours, usually within 2 miles. A competitor is a restaurant that offers a similar guest experience to you in the same market. That can be harder to define than you think. For example, fast food restaurants don’t always compete with each other. You might have a target demographic (say, families) — a target demographic that is radically different than another fast food restaurant that caters to late night eaters.

Competitors can be restaurants that serve a similar style of food, that have a similar cost, or that cater to the same audience. Start by making a list of these true competitors.

Ask yourself where your current customers would be likely to eat. Group these competitors into three categories. There are three different kinds of restaurant competitors.

  • Direct competitors – Provide the same products or service you are providing.
  • Occasional Competitors – Provide services or products that are just a little different than yours.
  • External Competitors – There’s no competition with you at the moment but they could be at some point.

As you do a competitive analysis you’ll want to make sure you’re focused on how all three of these groups are performing, especially when it comes to your competitor’s online performance.

Step 2: Ask Yourself The Right Questions

Now that you have a list of competitors, ask yourself these questions:

  • What do those competitors sell?
  • What’s their atmosphere like? How about the food? What makes them unique?
  • What do customers think of their business?
  • What potential threats do your competitors show?

Step 3: Mix in Some Data

Time to open up the spreadsheet. List every single one of your business locations, no matter how big your company is. Track the star rating of your competitors across online major review sites like Facebook and Google

How do your restaurants stack up? There’s all kinds of interesting insights you’ll notice. You might find that one of your locations has lower star ratings because it only has a few reviews. By digging through the positive comments on a competitor’s reviews, you might find a few simple things that you could add to your restaurant (for example, the restaurant down the street offers half off drinks one night a week).

You can use the insights found within other restaurant’s reviews to see what your competitors are doing well in and where they are struggling. You’ll have an advantage using that information to better your restaurant.

You may also find there are a few recurring problems one of your locations. 33 percent of consumers refuse to eat at a restaurant with lower than 4 stars, according to our research. So, identifying problem areas — and resolving them — will be crucial for lifting your ratings and convincing more consumers to visit you instead of your competitors.

Megan Wenzl

Megan is the Associate Editor for ReviewTrackers. She's a writer who is committed to finding useful information to help your business succeed. Megan holds an M.A. in journalism from Columbia College Chicago.


  1. maddy Pippa

    The restaurant industry is highly competitive. Unless you have a star chef or a novel cuisine, chances are you will have trouble standing out from the crowd. Gaining a competitive edge requires a detailed analysis of the demographics of the surrounding area and the nature of existing competitors. And even if you are successful at first, new competitors could enter your market at any time to steal your clients. Don’t hesitate to adopt successful strategies from your competitors, but understand that directly competing with an entrenched rival is a bad idea for a beginning restaurateur.