INDEX OF RETAIL SATURATION

PRESENTED BY ,

P . GOUTHAM ,

HARISH ,

M . SABITA ,

M . SUDHAKAR
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Theory of retail saturation index is calculated to determine the saturation index of retail shopping district within a particular retail store types assumed potential demand per square meter of the potential demand for Wang Chen. Index of Retail Saturation (IRS) is a measure of the potential sales per square foot of store space for a given product within a specific trading area: ratio of a trading areas sales potential for a product or service to its sales capacity
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It is the ratio of demand for a product

(households in the geographic area multiplied by annual retail expenditures for a particular line of trade per household) divided by available supply (the square footage of retail facilities of a particular line of trade in a geographic area). = H x RE RF

IRS

Where IRS is the index of retail saturation

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RE is the annual retail expenditures for a particular line of trade per household in the area RF is the square footage of retail facilities of a particular line of trade in the area (including square footage of the proposed store). Retail marketing : a real combat Peking University Press , 2008 . 1 . view "[ M ].

The theory from the Harvard Business School Harvard Business School in the 80s of the 20th century. Retail saturation index theory (The Index of Retail Saturation Theory) What is the theory of retail and retail saturation index saturation index theory is the retail market by calculating the saturation index
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compares the level of retail expenditures in an area with the level of supply of retail selling space lIt is strategically sound to access how deeply competitors are entrenched in a given market area lIRS theory helps the retailer to access the level of demand and supply in various trading areas lA trading area in which supply and demand are in equilibrium shows retail saturation lRetail saturation means consumer needs are just being met with the existing retail facilities
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When that trading area has too few stores, the area is said to be under stored If IRS high, the area is under stored; if it is low, the area is over stored If too many stores/ selling space is devoted, the area is said to be over stored IRS is simply the sales per sq. ft. of retail space for a trading area for a given product line Trading areas or markets may be classified as overstores,understored or saturated.
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The interaction between demand and supply and the effect of creating market opportunities. The formula is: IRS = demand / store area Retailers must choose the area of the proposed comparative assessment of the level observed saturation index. In general, the saturation index is high, meaning that the retail potential, and means that the retail potential of the low saturation index small.
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When the IRS takes on a high value in comparision the line of trade in other cities,it indicates that the market is understood ,and therefore a potentially attractive opportunity exists. When it takes on a low value it indicates an over stored market,which precludes the potential of a significant opportunity. The home depot,for eg., monitors its sales per square foot for a store because it recognizes that if this ratio istoo high,customers may not be well solved and comptetion may be invited in to the market.
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Although this cannibalizes the existing store, it better serves customers and discourages competition from entering the market. As nonstore based retailing continues to grow retailers to recognize and that the IRS may become less useful Because incorporates only store-based retailing in the supply component of index the most. The impact of retail competition can be reproduced on a local map that shows the
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It measures of level of demand in a market based on the population,consumer expenditure,competing retail space and a particular product or product area. It measures in a market that the retailer is hoping to break in to or perhaps already committed to. When the above calculation has been performed,it provides some measure or index of attractiveness of trading area for a particular product line or product area. The higher the index the better the chances
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THANKYOU

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