What business can learn from it? Store network optimization is crucial for brand owners. But why?
China Resources Enterprise (CRE) has finalized acquisition with Tesco to create the largest food retailer in China by the end of May, 2014. The joint venture will combine Tesco’s 135 outlets in the country with CRE’s almost 1,000 stores, called Vanguard. Vanguard owns various business types such as hyper-marts, convenience stores, supermarkets and others. Among these outlets there are more than 250 hyper-marts. It is crucial for CRE to effectively carry out integration and store optimization plan after the acquisition. >>
To better execute store network optimization, brand owners need to fully understand market potential and penetration of targeted city. Reviewing performance of current stores and comparing actual performances against potential’s to get a clear picture.
Steps of SNO (Store Network Optimization)
- Scorecard: to assess each branch and analyze competitor distribution
- Cannibalization analysis
- Channel optimization: overall planning of current stores (keep, improve, move or close)
- Market expansion: site selection of new stores in terms of untapped high potential areas