When looking at M&A opportunities, Placer’s trade area mapping highlights how trade areas overlap for stores within a region, which can help you understand what areas would have high or low cannibalization and learn how the various properties rank and perform compared to each other. Together, these insights help you to model cost reductions in 2 major ways:

1. Store closures for low performing or high cannibalizing assets. and 
2. Cost synergies from reduced corporate headcount or streamlined distribution in areas with complimentary trade areas   

You’ll be able to answer these questions after reading this article:

1. How much overlap and cannibalization is there between two chains?
2. How does each store rank and perform compared to others? 
3. What stores are candidates for closure post deal closure?

Step 1: Request a Placer XTRA Chain Market Coverage Map Report

This report allows you to analyze, for a given market, how much cannibalization two chains have, and details about their trade area size, population, households, and more, then use that to understand possible store closures (and economics) should a merger or acquisition occur. In this example, we analyze a possible merger between Kroger and Albertsons, specifically looking at two of their respective chains in the Chicago region, Mariano’s and Jewel-Osco

a. Navigate to the Advanced Reports page and click on Placer XTRA in the left sidebar.

b. Click on Chain Market Coverage Map (you can first filter by clicking on Chains under Reports Catalog).

c. Fill in the relevant fields:

• Input the name of two chains or tags (custom chains) that you want to analyze as potential mergers or acquisitions.  
• In the Date Range field, select the date range that you want to analyze prospective sites and your locations.
• Select whether you want the output to be an interactive map, or a status map.
• Select the trade area distance in miles
• Select the trade area traffic volume

d. For reference, a sample download is included in the instructions for the report. 

e. When the form is complete, click Submit Request. This report has a 4-7 business day turnaround time. Once complete, a report showing trade area overlap and details will appear in the MyZone portion of Placer, under My-Zone.

f. Analyze the map to understand the overlaps in trade area, noting how the two chains compare along various attributes like # of households, or household income (HHI), and others.

Pro tip: Instead of comparing standalone chains, or if a chain of interest is not showing up in Placer, you can create custom tags or cohorts of properties and analyze the M&A effects of those properties. To do so, simply create those properties as their own tag, as outlined in the article Create and Analyze Store Cohorts.

Step 2: Request a Placer XTRA Retail Ranking by Chain Report

This report allows you to analyze, for a given market, how much cannibalization two chains have, and details about their trade area size, population, households, and more, then use that to understand possible store closures (and economics) should a merger or acquisition occur. In this example, we analyze a possible merger between Kroger and Albertsons, specifically looking at two of their respective chains in the Chicago region, Mariano’s and Jewel-Osco

a. Navigate to the Advanced Reports page and click on Placer XTRA in the left sidebar.

b. Click on Retail Ranking by Chain report (you can first filter by clicking on Chains under Reports Catalog).

c. Fill in the relevant fields:

• Input the name of the chains or tag (custom chains) that you want to analyze, and the region.
• In the Date Range field, select the date range that you want to analyze prospective sites and your locations.
• Select the basemap type, which is the map coloring used to show differences in key attributes. You can select either median HHI, household value, population density, or a simple satellite view. 
• Select the number of properties to rank
• Add any other notes that are relevant to your analysis.

d. When the form is complete, click Submit Request. This report has a 4-7 business day turnaround time. When complete, a report showing trade area overlap and details will appear in the MyZone portion of Placer, under My-Zone

e. Analyze the map to understand the strongest performing locations for each chain, and compare it to the attributes of interest chosen.

Pro Tip: Instead of comparing standalone chains, or if a chain of interest is not showing up in Placer, you can create custom tags or cohorts of properties and analyze the M&A effects of those properties. To do so, simply create those properties as their own tag, as outlined in the article Create and Analyze Store Cohorts.

Perform this analysis as needed, by market, to consider all locations where the companies have locations.