Measuring Changes to Sales

The results of the above analyses can then be used to compare (1) new product sales and (2) sales shifted from other retailer locations, which result from the opening of a new retail center.

The total new sales that result from the opening of a new location and the method of calculation were discussed in "Changes in Total Product Sales" on page 369. The total increase in product sales throughout the market represents the genuine new sale creation that results. However, the difference between new total sales and the original total sales in the market will most likely be less than the total sales projected for a new retail location in "Measuring Changes in Sales by Retailer" on page 370. This difference is accounted for by cannibalization.

To measure overall cannibalization of other retailer sales, subtract genuine new sale creation from the estimated total sales of the new store. For example, if a new retail center is estimated to sell 100 items and the total sales in the market area are only expected to increase by 60 items, then the new retail center causes the cannibalization of 40 items away from other stores.

To measure the effect of a new retail location on the sales of other retail locations, measure the difference between the total sales of each retail location before and after the introduction of the new point of sale. These figures were calculated in "Measuring Changes in Sales by Retailer" on page 370. For each retailer, the total change in sales across all regions shows the loss of sales to the new store. This loss represents the cannibalization of that retailer's sales.

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