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RETAIL SALES POTENTIAL FORMULA <br /> Example <br /> Product Category: <br /> Trade Area: <br /> 1. Find the actual retail sales for this product in the trade area: <br /> (Source: 1992 Census of Retail Trade, <br /> sales tax or other estimates:) <br /> 2. Calculate the potential sales volume for the trade area, for this product: <br /> a)fmd total trade area households: <br /> (Source: 1990 Census of Population) <br /> b)times typical expenditures per <br /> household for this product: X <br /> (Source:Consumer Expenditure Survey) <br /> c)equals potential sales for this product <br /> 5 in the trade area: <br /> 3. Enter the potential sales(from#2)here <br /> and subtract from actual sales(#1): <br /> 4. This equals either surplus or leakage <br /> of sales for this product category in trade area = <br /> • A positive number would indicate a surplus of retail sales. <br /> • A negative number would indicate a leakage of retail sales. <br /> In this case,the surplus of sales confirms the Business Development Teaam's assumption that <br /> their community has a strong niche in restaurants. This builds on the conclusions drawn from <br /> the business inventory,survey of competition,retail cluster analysis,consumer surveys and the <br /> ' sales per household compared to the state. Now the team has a better idea how strong the niche <br /> is and the dollar volume of the market. <br /> • <br /> STEP BY STEP MARKET ANALYSIS-35 <br />