Market Size and Profitability Analysis for Retail Locations PPT

This PPT slide, part of the 109-slide Market Research Method PowerPoint presentation, presents a detailed analysis of market size and its correlation with profitability for family clothing retailers. It employs a CHAID (Chi-squared Automatic Interaction Detector) analysis to categorize various factors influencing store performance. The primary assertion is that market size, defined by town population, is the most critical determinant of profitability.

The analysis begins with the town population, which is segmented into different categories based on proximity to shopping locations and the number of national competitors. For instance, stores located more than 200 km from the nearest shopping area show an average contribution margin of 15%, indicating a strong potential for profitability in less competitive areas. Conversely, stores within 60 km of a shopping hub yield a lower average contribution margin of 6%.

The analysis further breaks down the data by the number of competitors. Stores facing 3 or more competitors have an average contribution margin of 15%, while those with fewer competitors show a slightly better performance at 8%. This suggests that competition plays a significant role in shaping profitability,, but the influence of market size remains paramount.

Additionally, the slide categorizes stores by size, revealing that smaller stores (under 10,000 sq. ft.) tend to have lower contribution margins compared to larger ones. The findings emphasize the importance of strategic location selection and market size consideration when planning new store openings.

This slide serves as a valuable tool for stakeholders in the retail sector, providing insights into how location and market dynamics can significantly impact financial outcomes. Understanding these relationships can guide effective decision-making for future expansions or adjustments in strategy.

This slide is part of the Market Research Method PowerPoint presentation.

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