“Without Placer, we would not have seriously considered Chantilly as it just seemed to be too close to our existing stores. Placer showing us that the trade areas were more distinct than we initially thought gave us the confidence to proceed, and now we've added $5.5M in new revenue with significantly less cannibalization than we anticipated. That's incredible."

-- Mark Russell, Chief Development Officer, Silver Diner

‍The Challenge

Silver Diner analyzes two new locations as possible infill expansion in mature DC metro area

Established in 1989, Silver Diner was founded on the idea of creating a neighborhood gathering place serving updated American Classics with Authentic Diner Hospitality. Over the last 35 years, Silver Diner has grown and evolved its original vision to an award-winning, chef-driven restaurant serving food reflecting today’s lifestyles; all without losing what makes a diner special – friendly hospitality.

As the acclaimed restaurant chain continues to expand, Mark Russell, Chief Development Officer at Silver Diner, faced the challenge of determining the viability of opening new locations while minimizing cannibalization of existing locations. With high potential locations identified in Chantilly, VA and Bowie, MD, Mark needed to understand:

Would opening a new location in either of the two proposed areas cannibalize nearby locations in a mature market, and to what extent?

‍The Solution‍

Placer data reveals true trade area overlap and potential cannibalization of nearby stores

Knowing Placer’s True Trade Area report could help provide insight into the cannibalization risks for these two opportunities, Mark started his analysis by examining the trade areas of existing Silver Diner locations in the Washington metropolitan area.

With the proposed Chantilly location just under seven miles from the Fairfax location, and ten miles from the Ashburn location, there were concerns about cannibalization. However, using Placer trade area data, Mark discovered the trade areas for these locations were distinct and had minimal overlap.

A new location in Chantilly could capture a new customer base from rapidly growing residential areas in and around Chantilly, while the Fairfax location's trade area would remain largely unaffected.

Learn more about Trade Area

On the other hand, Silver Diner discovered the extent of trade area overlap between the proposed Bowie location and an existing Silver Diner location in Woodmore (Landham) was far greater than anticipated. This overlap indicated a significant risk of cannibalization, with an estimated 20-25% potential drop in traffic and revenue for the existing store.

Moreover, an examination at active competitors near the potential new Silver Diner location in the Bowie, MD area revealed a heavy overlap in trade areas (as high as 52% in one case), serving as the final nail in the coffin.

With the data showing that the customer base for Bowie would heavily encroach upon Woodmore's trade area, Silver Diner made an informed decision to reject an expansion location in Bowie, MD.

The Outcome

SUCCESS: Silver Diner opens Chantilly location, adds $5.5M in revenue with minimal cannibalization

Following the successful opening of Silver Diner's new Chantilly location in November, Mark returned to Placer to analyze the impact of the new location on traffic to the Fairfax and Ashburn locations, anticipating a 10-15% drop in traffic for the four month period after the new store opened.

Learn more about Baseline Trend

However, Placer data showed just a 3% decrease for the Fairfax store, which soon rebounded (excluding the impact of severe snowstorms on visitation in January). Similarly, the Ashburn location experienced minimal negative impact, seeing visitation drop around 10% in November before returning to double-digit growth.

Using Placer.ai data to gain insights into the trade areas of the potential new store locations gave Mark the confidence to open a new location in Chantilly, adding an additional $5.5 million in revenue and demonstrating Placer’s effectiveness in guiding strategic expansion decisions.

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