If you think you often see stores of similar chains group together, you may be right. The right neighbour can triple your sales, new research indicates. To many Belgian stores, the favourite neighbour seems to be Dutch drugstore chain Kruidvat.
Powerful synergy
Retailers often choose locations near to competitors’ stores for new store openings, and there is a good reason for that: a good neighbour can easily add a bonus of 20 % to a store’s sales. “In fashion, this can even be a bonus of 200 %”, RetailSonar’s Pieter-Jan De Smet claims. His company has diligently charted the 17,438 locations of Belgium’s 150 biggest chains in retail and services, and found some interesting conclusions.
The most common neighbour is Kruidvat: 3,820 stores of the biggest chains in Belgium have one of their stores no more than 250 metres away. Carrefour (3,698) and Zeeman (3,044) gain silver and bronze, respectively. None of the three is a major surprise: after all, they all have a vast number of stores, and they are mostly looking for the same kind of area.
Remarkable combinations
A few combinations, however, are more striking than others: three out of every four Hans Anders optics stores are found within a 250 metre perimeter of competitor Pearle. Drugstores and stores selling hearing aids are also quite often neighbours, as is the case with perfume stores (nine in every ten Rituals stores is found next to an ICI Paris XL). In fashion, remarkable combinations are those of Veritas, Hunkemöller and H&M, while Torfs (shoes) and JBC (fashion) are also often neighbours – but of course, shoes and clothes form a perfect match.
Supermarkets often keep a bigger distance, but still, 22 % of Albert Heijn stores is within 250 metres of a Lidl. Aldi-Lidl combinations are also quite frequent (20 %). Remarkably, Action is much less of a popular neighbour than the other major chains, even though it attracts major crowds to its stores. Possibly, their quite unique location policy may be the reason for this anomaly.
