Why are there three Thai restaurants on my block?

May 19, 2008 1:08 PM

Why do I often see two, three, even four different Thai restaurants on the same block, sometimes even right next to one another?

I've seen this in New Haven, CT and multiple neighborhoods in Chicago, IL - so it's not isolated to only one area.

I've always assumed that it had something to do with mutual support and valuing community - but even so, doesn't it make it difficult to make a living?

posted by bubukaba to society & culture (22 comments total)

That's true of St. Louis, four such restaurants on one street, within roughly a mile of one another - a feature to which I refer as The Delmar Thai Cartel. In our case, rumor has it that a single extended family owns all four restaurants. Waiters will sometimes shuffle back and forth between them.

Each restaurant specializes slightly - one will do "country" (I do not know enough about Thai cuisine to know what the difference is between country and, say, urban), one will do northern, one will do southern (supposedly the former is more lime-heavy, the latter more spicy), one does seafood, etc.

Hit all of them. Not to name names, but one here has some fairly awful food.
posted by adipocere at 1:17 PM on May 19

Probably for the same reason that fast food joints cluster: it's been shown to be good for business.
posted by bricoleur at 1:25 PM on May 19

Hotelling's law

From the wiki:Hotelling's law predicts that a street with two shops will also find both shops right next to each other at the same halfway point. Each shop will serve half the market; one will draw customers from the north, the other all customers from the south.

One of the only things I remembered from economics class.
posted by rooftop secrets at 1:28 PM on May 19

I've heard that one succesful store will attract more succesful stores selling the same product, and that an area will then develop a reputation for whatever that product is. So that area will be the "thai" area and attract people looking for Thai food. Makes no sense to me, but it's a theory I've heard. Seems like you'd be better off being the only Thai place in your hood and getting 100% of that Thai business, rather than having people travel and then have to choose from 4 places.

I've heard about blocks in NYC with multiple florists, due to the same theory.
posted by sully75 at 1:40 PM on May 19

As an elaboration/addition to what rooftop secrets said: the benefits of being located in the zone where people go when they want Thai food (or "restaurant food" more generally) will often outweigh the benefits of being the sole provider of Thai food somewhere else. There may also be cost savings associated with deliveries etc.
posted by game warden to the events rhino at 1:42 PM on May 19

Around here, there's a stretch of street in the southwest part of town with three Korean restaurants and a Korean grocery. The restaurants are a bit different -- one is a bar/restaurant that's only open afternoon and evening, one's a normal Korean restaurant, and one's a Korean/Chinese restaurant. Not too far from there is a Korean Baptist church. I assume this means that the local Korean community is clustered in that area.
posted by CrunchyFrog at 1:43 PM on May 19

sully75 beat me to it.

Makes no sense to me, but it's a theory I've heard.

You wouldn't expect a better meal in Chinatown than from your random local Chinese restaurant in the suburbs? I would, though admittedly perhaps not for fully rational reasons.
posted by game warden to the events rhino at 1:45 PM on May 19

it's a thai neighborhood? (i'm from chicago--*everybody's* got a neighborhood.)
posted by RedEmma at 1:48 PM on May 19

or come to think of it... a hipster or yuppie neighborhood? isn't Thai food a favorite of young urban cosmopolitan-aspiring sorts? if i owned a Thai restaurant, i'd put it in the place where the young "adventurous" people with the money are.
posted by RedEmma at 1:51 PM on May 19

Because they think they're Starbucks?

Seriously, I actually wonder the same thing about Chinese restaurants in Burlingame & San Mateo. Zillions of empty Chinese restaurants. And I just don't get how any of them stay in business or have any profit whatsoever. They rarely deliver and I never see them filled. (And I don't like Chinese food so I'm not going to help them out, either.)

I'm a big fan of Thai food though, and it's true that there are actually four different regional cuisines: Northern, Northeastern (or Isan), Central & Southern. They're similar but different... some use more coconut milk, different spices, more lime juice, or whatever. Most Thai restaurants still stick to a semi-standard yellow, red & green curry/pad thai/mee krob/nasi goreng/tom kha kai, etc. menu as a base, though... probably because restaurant owners know that some American customers aren't as adventurous and get hooked on one meal they like to order all the time.
posted by miss lynnster at 1:52 PM on May 19

In my experience in Chicago what happens is:

We plan to go to, say, Sticky Rice, but its full. The place next door is has seating. We just end up going there. Its not as good but we got seating.

So if one thai place is consistently getting full it might be worth it open up next door and get their overflow. If this keeps up you now have a "Thai Row." After a while people forget who the new kid on the block is and business begins to even out.
posted by damn dirty ape at 1:55 PM on May 19

I'd always wondered about this too, but it's starting to make sense given the explanations above. I lived near the Spoon/Opart/Oscar block for a few years and ended giving all three of them a lot of business. It started out with "well, we always go here, let's give the place two doors down a try" and ended up with "okay, this place is a little bit cheaper, but I like the X better here." From the customer's perspective it's almost like having a really big menu.
posted by Metroid Baby at 2:15 PM on May 19

if one thai place is consistently getting full it might be worth it open up next door and get their overflow

We have a winner. This is why Starbucks often opens up stores so close to each other (across the street from each other in some cases) -- they would rather get the overflow themselves than let one of their competitors get it.
posted by kindall at 3:27 PM on May 19

Thanks for the interesting answers!

To clarify a few things, I'm not talking about ethnic neighborhoods - the places in New Haven and Chicago where I've seen it happen are neighborhoods with a lot of students. It's rarely a case of different regions of Thai food, either, though I have seen that too. Also, I've never really noticed it as consistently with any other cuisines - only with Thai places. It could be that I don't notice multiple pizza places or delis or Chinese places as much, since they seem like more 'usual' food genres and I guess Thai might seem more 'exotic' or something.
posted by bubukaba at 4:15 PM on May 19

adipocere: It's not just a rumor about the St. Louis Thai cartel—though I, too, thought it was until just last week, when I saw this site in a listing. Here's its website.

In their case, they started with one restaurant, the Thai Cafe east of Skinker, and realized, when the Loop began to show signs of revitalization, that they could attract Wash. U. students with just slight modifications to their menu and a slightly friendlier location. Thus Thai Country Cafe. Then demand built, à la kindall's theory, and voila! Four Thai restaurants were soon in place within two blocks of each other, all owned by the same family.

I'd have to bet that their restaurants are extremely lucrative now—they got in when the Loop was still a frightening place of wandering derelicts and crack whores, and now they're reaping the benefits as the area has grown increasingly commercialized and gentrified.
posted by limeonaire at 5:09 PM on May 19

We have a winner. This is why Starbucks often opens up stores so close to each other (across the street from each other in some cases) -- they would rather get the overflow themselves than let one of their competitors get it.

Actually, the Starbucks example does not really address the same point as the one raised in the OP's question. Starbucks does this to squeeze out competitors, even though they cannibalize their own business in the process; they tolerate that loss as part of the broader market-dominance battle. That wouldn't apply to two Thai restaurants opening on the same block, unless they were part of the same chain. A restaurant might open up to try to catch the overflow from another, but Starbucks is doing something more than that.
posted by game warden to the events rhino at 5:32 PM on May 19

Also, I've never really noticed it as consistently with any other cuisines - only with Thai places.

This isn't just with Thai restaurants by any means. The OP mentions New Haven, which also has three Indian restaurants on the same street, all three being within maybe five feet of each other. And there are certain streets in New Haven that seem to have waaay too many pizza places for all of them to be solvent, yet they've been there for forever.

The proximity of the Indian restaurants seems to make sense for two reasons, 1.) I think that at least two of them are affiliated in some way, mainly because their menus are pretty much exactly the same. But one building is larger than the other and different in style. 2.) When I want Indian food (and I don't have my heart set on one of the other Indian restaurants in New Haven) I can head to this section & make my decision when I get there. Even if you have a favorite place on that street, you're most likely going to want to try out the place right next door at some point as well so it works out for everyone.
posted by eunoia at 6:17 PM on May 19

Letter printed in the local paper: "I look out of the window of my favourite Thai restaurant and see four other Thai restaurants, is this a record?".

Reply the following day: "I look out of the window of my favourite Thai restaurant and see nine other Thai restaurants. P.S. I live in Bangkok".
posted by AmbroseChapel at 6:30 PM on May 19

No one's really touched on the fact that this probably has a lot to do with the way restaurant and retail placing in general works in Asia.

I can't pretend to understand it entirely, but this phenomenon applies to just about everything in Southeast Asia and probably a goodly portion of the rest of it too. I used to live in Saigon, and there was a street or intersection for everything. You want a safe? Go to the safe street, there are like eight shops there that sell nothing but safes. Fish tank? Wicker chairs? Dog meat? Same deal.

This seems to run counter to the way I've learned to think about economics (read: not very well), but it does make some sense - where do you go if you want a safe? Target or Home Depot, probably. But what if you live someplace without gigantic department stores? You go to the safe street. These things aren't impulse buys like a pack of gum or bottle of water, and as such you're probably going to do worse if your store is somewhere people aren't looking to buy whatever you're selling.

I think game warden to the events rhino is spot on with this: "[...] the benefits of being located in the zone where people go when they want Thai food (or "restaurant food" more generally) will often outweigh the benefits of being the sole provider of Thai food somewhere else."

That holds true in America, too. I doubt there's one simple answer to this and it probably has to do with areas full Thai immigrants and people who are likely to eat Thai food as well, but there's a start for you.
posted by borkingchikapa at 8:18 PM on May 19

Heh. There's three sushi restaurants on the same street in my town, two of which are right across from each other. One of them has a great lunch special where people line up at 10 a.m. to get in, I always assumed the (much less good) other restaurant was trying to be the nearest second best.
posted by jenfullmoon at 8:31 PM on May 19

You know what they say...LOCATION, LOCATION, LOCATION. If there is a really popular restaurant someplace, and another prospective business hears about it, they'll want to be near by, so that people notice their place and maybe decide to walk in. Genius usually concentrates itself into clusters, the same goes for popularity. Cheers.
posted by Fizz at 2:00 PM on May 20

Nothing to add about the why, just adding to the pile-on -- downtown Olympia has at least 4 and maybe as many as 6 Thai restaurants. (Vegetarian cafes are the only similar sort of cluster, restaurant-wise.)
posted by epersonae at 1:31 PM on May 21