Some may view it as a threat to business viability while a few will see it as the driver that helps everyone improve. Some may view it as a reason why some fail while others see it as the reason a few succeed. Too often a few will proclaim that the pie is simply being cut into smaller pieces while visionaries view it as the way the pie gets larger. Competition has been referred to as the negative aspect of free enterprise while optimists applaud it as the opportunity that free enterprise offers.

Can there be too much competition? Of course, if, in this case, too many restaurants open before the marketplace has a chance to catch up, then failure rates will increase regardless of how operators respond. However, the benefits of appropriate competition are quite pronounced. Let’s take a look:

[]       RAISING THE BAR

Consumers don’t know what they don’t know, until they know what they didn’t know. Quite a complex sentence but think about it: Commercially produced bread is acceptable and considered the norm when that is what is available. Until…an artisan bread baker enters the market and shows consumers just how good bread can be. Once introduced to a remarkable product, consumers are less inclined to accept what had been the norm. That one restaurant in a crowded field of operations that chooses to make this one simple change towards excellent bread will push others to do the same. Operators learn from other operators who push for positive change. The same can be true for the quality of purchased meats and fresh fish, an expanded wine list, broader selection of regional beers, an upgrade to quality coffee and tea, or even improving the sound system in dining rooms. The restaurant that washes their windows and sweeps their parking lot every day will push others to do the same.

[]       THE RESPONSIVE SURVIVE, THE RESISTANT SHALL PERISH

The first to take a step towards excellence will always have an advantage, but so will those who take it to heart and move to adapt to changes in the marketplace. Competition defines how to survive and thrive. Those who stand firm and refuse to use competition as a learning opportunity will surely shorten their life cycle.

[]       COMPETITION CREATES MARKET INTEREST

When operators change their interest from “me” to “we” then competition can be seen as that rising waterline that lifts everyone to a higher level. When everyone begins to align with constant improvement (whether by choice or forced by a competitive marketplace) then the community of restaurants will notice rising interest inside and outside the traditional market. This is how neighborhoods or towns become known as food destinations. When the choice is degrees of excellence then customers will view the community as a destination for a great meal.

[]       COMPETITION DRIVES INNOVATION

At first, restaurants in a competitive market will do what they can to “keep up” and follow the lead of those first innovators. After a while, that innovation bug will take hold and those once viewed as followers will seek to innovate on their own and trade benchmark positioning.

[]       COMPETITION DEFINES VALUE

Every successful restaurant hopes that customers will leave their operation satisfied with the meal, the service, the ambience, and the overall value of a meal. Customers will naturally compare one operation to another, and the benchmark of value will become that comparative example by which others are judged. What restaurants charge is less important than how its value is perceived. Inexpensive but mediocre has far less staying power than pricy but well worth it.

[]       COMPETITION EXPANDS THE MARKETPLACE

When quality is pervasive, when excellence at any price point is the norm, when customers can expect both quality and value from every restaurant in a town then the market will cease viewing greatness in terms of one operation and begin to see that community as a beacon of greatness. “If you want a great meal from burgers to fine dining, then you must travel to…”

[]       COMPETITION BECOMES A NEIGHBORHOOD’S POSITION

Culinary communities that thrive will always attract more great restaurants and enthusiastic chefs. A community interested in competitive quality and innovation will constantly raise the bar as new operations enter the field and demand it so.

[]       COMPETITION CREATES A MARKET FOR THE BEST EMPLOYEES

Finally, and maybe most importantly, when competition drives pursuit of excellence and value, when great restaurants of all types find a place in that community, then the best employees will gravitate to the area. Great employees will seek great restaurants – plain and simple.

Embrace competition – it is the lifeblood of free enterprise. At the same time, remember that competition is not a battle but rather a collaborative endeavor that offers greater opportunities when restaurants work together to define how they want to be collectively perceived.

PLAN BETTER – TRAIN HARDER

“Work Hard and be Kind” – Dick Cattani

Harvest America Ventures, LLC

Restaurant Consulting

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