Industry sector:

Sandwich bar: Market research

When you plan your new sandwich bar business it's very important to research your market - how much potential demand there is and how well that demand is already being met.

Estimating demand

You'll want to make sure that there's enough demand for a sandwich bar in your area. Be aware that competition in the sector can be intense - sandwiches and other snacks are available from many other types of outlet. You're likely to face strong competition from some or all of the following among others:

  • other sandwich bars, coffee shops and juice bars - including the big chains like Subway, Pret a Manger, Starbucks and Costa
  • retail bakers (look out for Greggs shops) and delicatessens
  • supermarkets and other large shops like Boots, Marks & Spencer and WH Smith
  • cafes, take-aways, snack bars and pubs
  • the major burger chains - many sell 'deli style' sandwiches too
  • convenience stores, petrol stations and newsagents

Try to find out how many outlets there are in your area that already sell sandwiches and take-away food. A walk around the immediate locality will give you a good idea as to who's selling what.

Carrying out a head count on different days of the week outside an existing sandwich bar could help you to build up a picture of demand in your area. It'll also help you to find out how busy your competitors are at certain times of the day - and what days are likely to see heaviest demand. You could also do a footfall count outside your own proposed location at various different times of the day to get a feel for how much passing trade there's likely to be. Again, try to repeat this exercise on a number of different days of the week. Ideally, do this before you make a final decision on your premises.

Check out the local area to make sure there are enough potential customers nearby. For example, are you near to lots office buildings and businesses, or maybe a university or busy shopping area? Try to find out whether there's a sandwich business already delivering to local offices and businesses. If not, you could ask if you can advertise your range to their employees.

Checking out the competition

You'll want to make sure that plenty of customers will choose your sandwich bar rather than your competitors, so it's a good idea to visit your main competitors' outlets to find out what you're up against. You could visit each of your competitors during the peak lunch time period. Try to find out as much as you can about their businesses during your visit, including:

  • how busy they are and how long it takes to get served
  • whether they offer made-to-order or pre-packed sandwiches
  • what range of fillings they offer and what types of bread they use
  • what prices they charge and whether they have any special offers
  • what other products they serve
  • whether they offer eat-in sales as well as take-away
  • what standard of service they offer

Also note down any other general impressions that occur to you. It will help if you're as thorough as possible when you do your market research.

Use your research to try to think of anything that will give you an advantage over your competitors. For example, your research may immediately indicate that there's a niche that none of your competitors cater for, such as offering Fairtrade or organic products. You might find that all the sandwich bars in your area have lengthy queues - this could indicate that customers would appreciate a sandwich bar that offers pre-packed sandwiches so they can buy their lunch more quickly.

Find out what people want

It's a good idea to talk to as many potential customers as possible before you open and ask them what they would look for in a good sandwich bar. This feedback can be invaluable in helping you to target your offer and provide an outlet that gives customers what they want. You could ask as many potential customers as possible questions like:

  • what sort of breads and fillings they prefer
  • do they prefer pre-packed or made-to-order sandwiches
  • what other food and drinks they would consider buying
  • what opening hours would suit them best
  • what they think of your proposed prices
  • whether they would use an online or telephone order service (if you are thinking of offering this)
  • what, if anything, they dislike about other outlets that offer sandwiches in your area

Don't forget that market research can be ongoing. Once your sandwich bar is open, talk to your customers - find out what they like and dislike about your outlet. Note down which items on your menu are popular and which ones don't sell well. You could even have a suggestion box on the counter to encourage comments and suggestions to ensure that you continue to meet customer demand.

Making sandwiches for other outlets

If you decide to offer wholesale pre-packed sandwiches to other businesses like cafes and newsagents, or even to larger organisations such as hospitals, you could:

  • count the number of potential wholesale customers in your area, say within a five to ten mile radius from your premises
  • approach some and ask them if they would be interested in buying your sandwiches on a wholesale basis

When you get a positive response - either a definite "yes" or an expression of interest - ask them:

  • what sort of fillings and other products they would want, and what price they would plan to sell them
  • how many sandwiches they would want and on what days
  • what profit margin they would look for - is this enough to cover your costs and profit

Agree who would bear the cost of any unsold sandwiches. If you offer pre-packed sandwiches wholesale to other retailers then it's usual to offer them a limited or full sale or return option.

Bear in mind that the pre-packed wholesale sandwich trade is very competitive. If you're going to persuade a potential customer to change their supplier you'll probably have to offer them a better range of products or improved terms of trade than they currently receive.

Use the Record sheets to help you with your market research.