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Look Before You Lease: Keys to Site Selection and Renewals
11
Don't forget about store
cannibalization
Your competitors aren't the only stores to think about.
Your own nearby stores—and sister stores—will compete
with the site, too. And if there are nearby stores serving the
same trade area, some of your sales will simply be the result
of cannibalization. It's money you (or a sister company)
would've earned without the new site. At times, accounting
for cannibalization may demonstrate that one site which
appeared to be a better opportunity would contribute less to
new sales than an alternative location.
Sister store cannibalization may not impact your business
directly, but by siphoning off sales f rom another store owned
by your parent company, it certainly doesn't maximize the
benefit to your parent company, and that won't do you any
favors.
Something to think about for renewals: years ago, you may
have selected a perfect site, but a recent acquisition means
it's now cannibalizing a sister store. When you factor in the
new cost of cannibalization, it may make more sense to
relocate than renew.
