Quarantines and stay-at-home orders have forcibly reduced demand on restaurants and retailers. An inevitable consequence is going to be store closures, and you may already have done this. Yum! Brands has temporarily closed 7,000 locations around the globe and many other restaurants and retailers are following suit.
Deciding which sites to keep open and which to close is much more data-driven than just looking at internal numbers from the past few months. For example, consider the trade area served by each store.
The image below was generated by Sense360's Site Performance tool, and it shows the foot traffic coming from other locations in the surrounding area - it can show us often and how far consumers travel from Point A (work, home, or somewhere else) to Point B (your site).
The draw of customers from the surrounding area can differ from store to store, and many brands have sites that overlap in drawing customers from the same place.
Data-driven decisions, store-by-store, can inform which locations have the "best trade area characteristics".
If you determine that your stores may be at a point of transition temporarily or permanently, Sense360 can help assess your plan. Closing a store solely based on sales numbers is risky because you may be losing a quality site with long-term future value.
A site with low sales may actually have high potential that's not being met because of operational issues that, if debugged, would resolve the site's traffic shortcomings. Our goal is to help you understand the quality of the site so you can make the correct near-term decisions and keep your focus on long-term value.
The foundation of our approach is the site evaluation model used to build 13,000 McDonald's and 3,000 Chipotle stores in the U.S. market. We layer on proprietary Sense360 foot traffic and transaction data from millions of users across the U.S. We add quantitative expertise to combine and analyze the datasets. And we work in partnership with you, focused on tailoring solutions that optimize your performance and profitability.
Keep in mind that once the COVID-19 crisis ends, the demand for dining out and shopping will increase dramatically. The consumer will have significantly fewer choices as the restaurant and retail industries consolidate. Eventually, after you weather this storm, you will pivot to growth mode, and at that time we'll help you select new quality sites. There will many high-potential sites that will become available post-crisis and landlords will be anxious to find quality tenants for their properties.
If you would like to see a demo of Sense360's Site Performance tool, please contact us.