Cannibalization describes a drop in same-store sales of existing locations following the opening of a new location nearby. Restaurant owners must be mindful of cannibalization risks to strategically plan new locations, prevent internal competition, and sustain the success of existing locations within their chain.Placer can help you mitigate the impact of cannibalization through data-driven site selection using trade area overlap information and insights.

After reading this article, you’ll able to answer the following questions:

1. What are trade area overlaps?
2. How can you analyze the trade areas of multiple restaurant locations?
3. How can you measure cannibalization between chosen restaurant locations?

Get started with the steps below:

Use the Trade Area Overlap function to accurately measure cannibalization between store locations

a. Open the Placer report for your chosen POIs^{Point (Location) of Interest.}. You can select these POIs from the Explore view by typing your POI into the search bar and checking the empty white box next to your POI in the center of the page or on the left sidebar. The number of POIs selected will appear at the bottom of the left sidebar. Once the POIs are selected, click Open Report. Alternatively, you can open a report for a single location from the Property view and use the + in the header to add locations to the report.

b. Navigate to the Trade Area^{Representation of the dispersion of home and work locations that drive traffic to any venue.} section in the left sidebar, then scroll down to Trade Area Overlap.

c. This feature shows you the overlap in the POIs’ trade areas by land size or population counts. In this example, you can see the overlap that exists between the two Pet Supplies Plus stores.

Learn about Trade Area Overlap

d. Navigate to the Demographics page and refer to Audience Profile. Add the second POI.

e. Select one of the datasets from the drop-down menu below the map to view the demographics and details of both trade areas and to learn about any differences between the store locations.

Pro Tip: Customers with the Spatial.ai dataset add-ons can view more detailed differences in these trade areas. Discover more about visitors’ interests, web searches, and shopping habits. For more information on Spatial.ai datasets or to request pricing information, click here.