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@GaussZ

I've not been to Brick Lane but there are similar areas in Chicago. Chinatown has endless Chinese restaurants on the south side. Devon Avenue on the north has curry place after curry place.

These exist for a few reasons.

First, immigrants often naturally group together in certain areas of a city. This is very true of Chicago if you study the demographic profiles. It is not surprising that people want to open a business in the community they live in and eat food they are familiar with.

Second, these streets become destinations in and of themselves. "Let's go get some curry up on Devon Ave (Chicago) or Brick Lane (London)." You may not even have a particular restaurant in mind - you just go there and see what you find.

I would guess that those restaurants are able to survive because they exist in a community where there is high demand for their goods.

Those businesses are competing with each other but there is enough demand for their product in one area that they can all stay open.

Going back to the beach analogy it is like everyone on the beach wanting a LOT of ice cream AND people travelling to the beach because it is known for its great ice cream (presumably they know how to make the best ice cream, curry etc).

Back to my earlier comment, restaurants do like being next to one another and they would prefer if the product is different. Why?

Imagine there are two retail spaces available in a town that has no restaurants. You want to open a curry restaurant in one of the spaces and sign a lease with the landlord to do so. Ideally you are the ONLY restaurant in town. If people want to eat out they have to come to you. Now the landlord wants to lease out the other space - what would you like to see there most? Another Curry Restaurant, a pizza place, or an ice cream shop?

I can tell you for a fact that fast casual restaurants in the USA love being next to a Starbucks because people got to Starbucks everyday. That means if you sell sandwiches people know exactly where you are. They see you everyday and you are right next door to one of their favorite establishments etc.