How do I deal with competition in a small market?

I started a cafe in Dulwich Hill just over 2 months ago (Cafe Trreat) and we have a lot of competition in the area. The previous cafe on the premises also had a bit of a bad reputation that we are trying to overcome. The cherry on top being Tella Balls Cafe (the famous Nutella cafe) opened up 3 weeks ago just around the corner, within walking distance.

This took a hit to our turnover. I have been doing a lot of advertising in the local community pages on FB (Marrickville is quite a patriotic area with over 7k members) in addition to handing out discount cards, inviting numerous food bloggers (only one has showed up to date) and partnering with bigger companies for items such as coconuts and cronuts to try and get our name out, but to date we still have quite a low following and the turnover isn't growing.

Does anyone have any ideas how we can get our name out more, or any promotions that often catch your eye as we need to see some changes quite quickly. Money is a factor, so maximum results for lowest output options are ideal.

Top voted answer
George Grimekis CPA

George Grimekis CPA, Accountant at Alpha Omega Accounting & Business Solutions

Hi Melissa,

Firstly, I had a quick look at your Facebook page. I also had a look at your competitors Facebook page. Whilst you may offer similar products, your competitor is promoting themselves as a dessert bar only, whilst you seem to have some healthier items on your menu. Perhaps promoting the healthier items more than the sugary dessert items will appeal to a different, more health conscious, consumer.

Secondly, I would consider myself local, a few suburbs away but i have never heard of your cafe. Perhaps expand your marketing and promotion out further than just Marrickville/Dulwich Hill. If your food tastes as good as it looks (on your Facebook Page) i will definitely bring my wife past so we can have breakfast/lunch one day. It's only a 10-15 minute drive away. :)

Thirdly, i'm more of an accountant and not a Facebook/social media expert. But how about running a competition on your Facebook page? "Share and win" where you ask your followers to share a photo that your have posted on your page. Once shared, you can ask people to post a screen shot of how many likes it has had by a certain date, and the winner may get a free breakfast/lunch on you. What would that cost you? $50-$100???

Perhaps do a play on that idea.

In saying that, an increased following on social media may not mean an increase in turnover.


Jef Lippiatt

Jef Lippiatt, Owner at Startup Chucktown

There are several tactics that I believe you should consider to see if they fit with your current needs.

  • Don't be afraid of odd sales / gimmicks (e.g. Perhaps a 1/2 drink if ordered before 7AM or a 1/2 drink if order a pastry before 8 AM). You can leverage this type of campaign to draw customers in at times that aren't typically peak traffic hours to get more people in the door.
  • Don't be afraid to ask patrons for feedback (why do they come to your cafe instead of your competitors? Why would they choose your competitors over you? Do they go both places? What is their deciding factor?) Customers can help you see areas that you may overlook or dismiss as trivial.
  • Don't be afraid to visit your competition (See, Smell and Experience what your competition is doing differently firsthand). You may notice their strengths and weakness which you can leverage to your advantage.
  • Don't be afraid to change (perhaps you need to change your menu, flavors or up your customer service). Don't get stuck in ruts that are not working. Adapt and reevaluate regularly.
  • Don't be afraid of being yourself (capitalize on what makes your offering different). Is your shop 100% local while others are regional or national chains? Emphasize to your customers and community that you are part of the community and that you are local. Are you getting your products (e.g. coffee, ingredients) locally? Show your support of those other local vendors to reinforce your local presence.

I hope that some of these ideas are usable for you or at least get you thinking of other ideas that could be beneficial to your current needs.

Ananda Raj Pandey

Ananda Raj Pandey, Developer at SavvySME

Top 10% Banking

You need to build loyalty Melissa. That is key to the cafe business. You can gimmick all you like but the most successful cafes out there have amazing people behind them who live and breathe this world. They're infectious! You can tell they're people people and they love not just making coffee and food and selling it, but they love connecting with their customers. Make your customers feel valued. There is no better feeling than walking into your "local" and having the staff greet you by name and who know your order and ask how your day was. I would take that and pay a slight premium ANYDAY. Of course, the food and coffee have to be top notch too. You can market, market, market all you like. But if the product (coffee, food AND people) aren't top notch, they won't "convert" and your marketing efforts will have gone to waste.

Lisa Ormenyessy

Lisa Ormenyessy, Business Coach and Marketing Specialist at

Hi Melissa, All the points above are great and good advice. I would also add - you have only been going 2 months - these things do take time.

Marketing is like a hot air balloon. It can take awhile to get it off the ground and start seeing results (its called marketing lag), however, once its working it takes less effort to keep it afloat.

Keep in the back of your mind that constancy and consistency will win the marketing race. Knowing that be sure to keep your efforts up, measure everything you, tweak where necessary and just keep going for now.

Perhaps jump on to Savvy in a couple of months time and let us know how you are getting on. Cheers, Lisa.

Carol Jones

Carol Jones, Owner at Interface Pty Ltd

Top 10% Online Business

Greetings Melissa from rural Australia,

What Ananda says is so true.

I live and work from my remote rural property in the Central Tablelands of NSW. My nearest regional centre is Bathurst. An hour's drive away.

As an online business, all trips into Bathurst are triggered by parcels to post.

And after standing in line at the post office, our first stop is at our favourite cafe/takeaway. Al Dente.

A cafe. And deli combined.

This little hole in the wall just jumps with people at any tick of the clock.

Not only do they have fabulous coffee. But they make everything fresh every day. The owner and her husband are chefs. And know exactly what the public wants. Being gluten free, it's also the only cafe that caters for me. My only other option is fish and chips.

They make the best smoked ham sandwiches. And. They sell to anyone who asks, as a deli item, whatever quantity of that ham you want to buy.

But the real icing on the cake is the staff. All crowded behind the counter. Smiling. Eager to help. Answering questions about what's on offer. And nothing is ever too much trouble for them.

There are three takeaways directly across the street. One right around the corner. Two dine in restaurants open for lunch further down the street. And the famous Legall Patisserie Cafe is half a block away.

It doesn't matter how much competition they have, they just rock.

Good food. Fabulous, friendly staff. And that intangible called charisma. All combine to make for one very successful hole in the wall ringed by competition.

Best wishes,

~Carol Jones, Ironing Diva❤

Purveyor of The Fitz Like A Glove™ Ironing Board Cover And Other Goodies

350,000 customers. In 29 countries.