Restaurant Research: How to Find out the Population Base of an Area

Not Doing Research of Restaurants in the Area Can Cost Restaurateurs

Two women in aprons, one holding an "Open" sign
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The value of doing market research when you're getting ready to open a new restaurant can't be overstated. Understanding who your potential customers are, where they live, and what restaurants in the area are doing will help you to tailor your restaurant concept to that demographic and increase your odds of success.

Finding the population base of an area can tell you the income range of your potential restaurant location. It will tell you whether there will be enough people nearby with sufficient expendable income to support your establishment, and it can provide guidance as to what they're most likely to spend their disposable money on.

Why Finding the Population Base Is Important 

You might assume that you know enough about a particular location if you're opening in your own hometown or a local neighborhood. You might think that doing any further research is unnecessary. This can be a costly mistake.

Really digging into the numbers in your area — like housing values, average household income, and average age — then contrasting this information with the number of competing restaurants in the area will help you determine the best type of restaurant to open.

You might tailor your concept to millennial customers rather than a baby boomer population if the average age in the area is 27.

Conducting a Site Survey 

A site survey is one way to figure out the population base of an area. Big chains and corporations routinely conduct some type of site survey before they begin building, but this isn't always an option for someone starting an independent restaurant because a site survey can cost many thousands of dollars.

Other Places to Look for Information 

You have other options for figuring out the population of a particular area, and most of the information is free.

Take advantage of local government reports. Speak with a representative from the Small Business Administration (SBA), or visit the nearest economic growth council for information on local employment and population data.

Population Censuses

The U.S. government publishes a population census every 10 years and it's available online. A census doesn't just tell you how many people live in a certain area — it also gives you a median age and household income as well.

These factors can influence your menu and restaurant style. For example, it would be a good idea to keep the menu prices on the inexpensive side if the median household income of an area is $40,000. By the same token, you can offer a slightly more upscale menu if the median household income is $200,000 per year. is another demographics-related site that can offer up some valuable data for a one-time fee. Esri offers a searchable database for this type of information as well.

Other Businesses

Pinpoint what the people in the area are spending their disposable incomes on, and incorporate this information into your plan. This can be as simple as counting the number of movie theaters nearby. Moviegoers often stop for a bite to eat before or after the showings, so this could be a trend you could cater to.

Likewise, an area that's chock full of kiddie-oriented retail stores and activities might not be your best bet unless all other factors are in line with your goals. Large families are less likely to dine out unless you take fast food and drive-thru restaurants into consideration. Alternatively, you could come up with a family friendly restaurant concept in these situations.

Pay attention to what other restaurants in the area are doing as well. If you noticed there are a lot of Italian restaurants, you might want to avoid those. Or you may see that an Irish pub in a low-traffic area is doing exceptionally well, perhaps indicating that there is more appetite for that kind of eatery.

Housing Values

Find out the appraisal values of local homes, or gather sales prices after they've sold. Prices are often published in local newspapers.

It can be an indicator that incomes are lower when houses are going cheap. Likewise, it's a good indication that incomes are high and people have extra money to dine out if most homes in the area are selling for well above the national median.

Institutions and Attractions

Find out if there any big businesses or attractions, either presently in the area or planning to come in, that will draw lots of people to the location. For example, a sports stadium or major medical facility will attract thousands of visitors from outside the local area, all of whom will want to eat at some point.

The Unemployment Rate

You can find unemployment rates for towns, counties, and states through local government websites. It can be important to have the most recent figures, but as a practical matter, these statistics stay relatively unchanged over short periods of time. For example, the U.S. unemployment rate was 3.6 percent as of May 2019, which was just 0.2 percent less than the same month in the previous year.

However, the local unemployment rate can be very helpful in affecting your decision to open a restaurant. You might want to think twice about locating your restaurant in an area where the unemployment rate is higher than the national figure, for example.