← Business Models: Industry Specific (Consumer, Services & Financial) (all topics)
Store cannibalisation
What it is
A new outlet taking sales from an existing one in the same catchment rather than generating incremental demand. It shows up as weak same-store sales at the older outlet even while total revenue rises
It is the specific risk of density-led expansion strategies
Impact on industries
- Turns network growth into an illusion - total sales rise while SSSG falls, and the chain adds rent and depreciation for revenue it already had
- Hardest to detect during expansion, since aggregate numbers look healthy until openings slow and the underlying trend surfaces
- Deliberate cannibalisation can be rational - denser networks cut delivery times and improve convenience, defending the catchment against competitors
- Delivery blurs the catchment entirely, so traditional radius-based site planning understates overlap between outlets