One of North America’s largest and most culturally influential cities, Toronto, Canada, is celebrated for its culinary diversity. As a city home to approximately 8,000 different restaurants and food vendors, Toronto offers nearly every kind of cuisine imaginable, from MICHELIN-starred fine dining to no-frills take-out spots and everything in between.
However, in a city that’s actively recognized for its abundance of restaurants, should entrepreneurs who are approaching the culinary industry have concerns about oversaturation?
Thinking about opening a coffee shop in Toronto? I’ve got a dedicated blog post to help you get started. Click here to read.
How Competitive is Toronto’s Culinary Industry
Is Toronto’s culinary industry too competitive for new restaurants to find success? The short answer is no. However, like any type of business, buying or building a successful restaurant means navigating all kinds of external variables – including competition.
What’s Behind Oversaturation?
From a business success perspective, one of the biggest misconceptions about oversaturation is that it centres exclusively around volume. In other words, some entrepreneurs estimate that because there are already so many restaurants in Toronto, the market must be too crowded to find success.
Of course, this isn’t the case. For instance, Toronto’s Little Italy is home to dozens of traditional Italian eateries – many of which have thrived for several decades despite being in close quarters with an abundance of restaurants offering a similar menu.
So what is the culprit? In reality, competition within Toronto’s restaurant scene is relatively nuanced. There are a number of factors both direct and indirectly related to competition that can impact a restaurant’s ability to thrive.
Thinking about opening a restaurant in Toronto? Check out these other blog posts for helpful tips!
- How to Sort Through Restaurant Listings
- Buying a Restaurant? Here Are 5 Questions to Ask
- How to Hire Restaurant Staff
Balancing Supply & Demand
Beyond just the number of restaurants in the city, there are a handful of different factors that play into market saturation. One of the most dominant of these factors is demand. In an area with a lot of restaurants and only a few potential customers, the gap between supply and demand can create a competitive atmosphere – especially if the restaurants offer similar dishes.
So, while it wouldn’t make sense for a village of 500 people to have 50 restaurants, Toronto, as a sprawling metropolis and major tourist destination, is a different story.
At the end of the day, the demand for food and drink services in Toronto is high. As a bustling major city, residents and tourists alike are always searching for their next favourite spot or a quick bite to eat while on the go. With that in mind, the gap between supply and demand is relatively balanced.
Filling Your Niche
One of the unique facets of Toronto’s culinary scene is the sheer diversity. There are so many different types of restaurants, each catering to a distinct niche.
From a market saturation standpoint, this dynamic is actually favourable for restaurateurs as it can create more space for individual restaurants to thrive by filling a specific type of customer.
For instance, a fast food franchise likely isn’t interfering with the business of a five-star bistro where reservations are booked months in advance. Sure, they’re both restaurants, however, the product and target demographics are so different that they’re not directly interfering with each other.
With that in mind, by carefully crafting a brand and customer base around a specific niche, restaurateurs can ensure their eatery stands out from other businesses.
Looking for more restaurateur resources? We’ve carved up some helpful tips for starting your restaurant on our blog. Check it out.
- How to Find a Restaurant For Sale in Toronto
- The Essential Restaurant Start-up Checklist
- How Long Does it Take to Build a Restaurant From the Ground Up?
Bringing Your Vision to Life
If you’ve been dreaming of opening your own restaurant, there’s no place like Toronto to bring your vision to life. That said, you’ll want to work with a dedicated restaurant real estate agent – that’s where we can help.
As professional specialists, we know the unique ins and outs of commercial real estate and Toronto’s restaurant industry. Not only can we help you find the perfect spot to bring your dreams to fruition, but we’ll also serve as your long-term advisor on all things restaurant-related.
Looking to open a restaurant in Toronto (or beyond)? We can help! Send us an email or give us a ring at 416-618-0054 to get in touch.
