3 important factors to take into consideration when choosing a F&B location

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Let’s make the assumption that you have a great F&B business model, dedicated staff and a powerful marketing plan. 

All you need is just a location. Where should that be? Always note that a business’s location can make a crucial difference to its success.

At this juncture, most people will go around hunting for a “good location”, the definition of a “good location” to most is just mainly areas with high foot traffic.

I do not think that a high rate of foot traffic is all that amounts to a good location. That is why I wrote the “Good Location for F&B might be a myth” article. 

Foot traffic is just one part of the equation, you need to know the “dynamics” of that area and what are the views people have towards the various tenants in that area. 

1. Foot Traffic

This is obvious. The higher the amount of foot traffic, the better it is.

2. Location Sentiment

A decade ago, you will need to commission AC Nielsen to do this but today, with the internet and the right tools, you can easily gauge the sentiments people have towards the mall.

You can in fact list down the things that they like or do not like about the place.  

Read also: LAI (Location Attractiveness Index)

There are generally two types of foot traffic sources. The destination shoppers and the practical shoppers. 

The Destination traffic are folks that will travel to a particular mall because they like the place and usually, they are not residing nearby. (E.g. travelling to Changi Airport because it is spacious with plenty of parking spaces, going to Kallang Wave Mall because it is scenic)

These are folks that are good business for the area as they add on to the number of pragmatic consumers who are there for a purpose. e.g. travellers in Airport or grocery shoppers in a shopping mall. 

You measure the location sentiments by listening to online chatter about it. You can of course do it manually or use tools such as Indices. 

The more favourable the sentiment is, the more attractive the location will be. 

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3. Tenants’ sentiments 

This is not new, any F&B consultant will always review the tenant mix in a neighbourhood or shopping mall. But what are they basing it on? Historical data? 

Listening to the online chatter of the 5 main groups of tenants will give you a clearer picture on the overall health of the tenants as well as the workability of the particular location you are looking at.  

You might also want to check out the sentiments towards the anchor tenant, the F&B outlets, the retail shops, the children stores and the entertainment outlets. 

If they are mostly positive feedback, that’s good as it drives repeat visits.  (which means potential income for your outlet!).

A very negative sentiment means you might want to reconsider the place even though it might be packed with traffic. 

Read how you can go about calculating the attractiveness of the location with the: Location Attractiveness Index article

You should only choose the location if 1) the human traffic flow is good, 2) the sentiment about the location and its tenants are positive. 

About the Author: 

Ebenezer Heng runs a community that reaches out to 0.5 million people daily (Oncoffeemakers.com’s digital assets). Lectures in a Singapore Tertiary Institution and advises digital marketing for organisations such as Chinese Chamber of Commerce, National Sports Association, Constituencies. 

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Posted by Ebenezer Heng on Monday, July 13, 2015

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