Is your cafe location an asset or a liability?
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Running a café in Singapore or any part of the world for that matter, people will naturally choose the best location. The question is, how do you define the best location?
Many of you will reply that it should have high traffic volume. Here, I am going to give you two scenarios that might make you rethink this notion.
First, Singapore’s Orchard Road is known as a shopping paradise. Crowds throng the streets and even on weekdays, you get a pretty high volume of traffic. Rental is crazily high, with some malls going at S$50 per square feet or even more.
It is known that in any shopping strip, there is a healthy turnover of 1-2 shops each month due to a variety of reasons. But what if the entire shopping mall (Orchard Gateway) is struggling for business?
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So if you are in this shopping mall with a prime location, is that good news?
Secondly, Marina Square which underwent an approx. $95million revamp is touted as one of the hottest shopping mall due to its proximity to Marina Bay Sands. Again, rental is high there because of the expected increased traffic the makeover is supposed to bring.
But earlier this year, Marina Square was plagued with rodent woes (rats was found in the soup of a restaurant). People started avoiding the shopping mall and many shops there including F&B outlets had to close their businesses.
In this case, it is bad news to be running a café in that shopping mall.
I am citing the above two cases, for people familiar with Singapore shopping scene. Malls such as Bedok Point, Century Square, 112 Katong etc will make one rethink the concept of choosing your store location based on high traffic flow only.
In the above two scenarios, location is more of a liability than an asset. My point is, if your café or F&B outlet is highly dependent on location for business, the business risk is very high.
Instead of investing a huge chunk of your operating dollars in location, you should be investing more in marketing instead to make your café a destination by itself.
Look here for some of the destination cafes in Singapore.
Referring back to the Marina Square scenario, it is interesting to note that while many businesses folded because of rodent woes, the restaurant with the rat in the soup is actually doing brisk business now.
This highlights that it is possible to mitigate any situation, even with such a dire reputation. Marketing your café as a destination itself and having the right positioning are most essential.
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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Previously: Making Coffee with a Coffee Sock.
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