Market Feasibility Study

A Market Study generates a prediction of gross annual sales for the first 5 years of the grocery store.  This prediction is based on a number of factors.  The key factors have to do with where the store is located and the potential customers who are in the vicinity (called “retail trade area”)

The Big River Grocery Market Study looked at several potential locations in downtown Helena and the site with the best location was the corner of Porter and Columbia, the site of the Presbyterian Church.  It has good visibility from busy streets and adequate parking.  It has more than enough space to accommodate the goods and services that would make it a full service grocery store (as opposed to a convenient store, or a boutique store only selling a few specialty items).

The main challenge identified by the Market Study has to do with the customer base.  In order to make predictions about potential sales, the Market Study analyzes demographic data.  The two main demographic factors are Education and Median Household Income.  Helena doesn’t score highly in either of these categories. <link to demographic data>

Our Market Study predicted a mature gross annual sales of $1M.  It takes time for new stores to ramp up to the full mature sales numbers because customers have to change their behaviours.  Just because a new and better store opens down the block doesn’t mean everyone suddenly stops shopping where they used to.  The Market Study includes a ramp up period that starts out at 75% of the mature sales and grows by 5% each year until the mature sales are met.