There are nine important guidelines for opening a venue in a new territory, according to strategy consultancy Pragma Consulting.
Describing the process of branching out into different regions, Pragma Consulting director Helene Mills advised operators to, firstly, understand “the opportunity”, “audience”, “mindset”, “occasion”, “local trends”, “price sensitivity” in the area. Speaking at last week’s Managed Pub Retail Summit, Mills stressed operators needed to consider the relevance of their offer in the area and consider ways a new business establishing itself in the area would have a point of difference from what is already available. She warned that operators may need to adapt their proposition to suit the area and consider how much they are willing to “flex” elements of their business model.
“What is most important to bear in mind when assessing the strength of an opportunity in a new territory or town? Market opportunity – ask what the size of the prize is, or the potential size. Within that is the target audience profile - ask who your customer is likely to be and how well represented they are in the population you have in mind. Think what their mindsets are, what their occasions for usage are and whether there are any local trends or preferences and cuisine types that should be taken into account” said Mills
“Take a sense check on price sensitivity and think in terms of relevance,” she urged. Ask yourself if consumers in this region or town will get it or will there need to be clearer communication of what the concept is all about in the new territory.”
Mills also reminded operators that they needed to consider “the landscape”, suggesting operators ask “who else is there, which other places are people eating in” and “how will you differentiate”.
“In terms of an optimal growth strategy into new territories there is also the importance of proposition execution,” said Mills, adding that food and drink business owners looking to expand will need to decide the elements they need to consistently deliver regardless of the region they are in as well as which elements are set and which ones “can be flexed to pique that differentiation and interest”.
