Site Selection

[JeffM]

I'm curious as to what everyone would look for when choosing a property for development of a full-service tunnel.

I know that capture rates can be expected anywhere from .5%-1.5% of traffic counts, but I am wondering what population size would be required.

We currently have 3 locations in a city of approx. 700,000 and wash just over 330,000 cars per year. There is only 1 other competitor who maybe washes 75-80,000 cars per year.

The area I am currently evaluating has a population (age 15+) of 60,000 people, higher than average income and the daily traffic flow count is 19,000.

Based on those numbers I would estimate about 190 cars per day, 5,700 per month, 68,400 per year.

Recent surveying indicates we currently pull about 40,000 visits a year from this area, meaning there would be a possibility to gain 28,400+ cars per year with the addition of the location.

I'm thinking that the gains in volume may not be enough to justify building a wash at this location. (I may have just answered my own question) Any thoughts?

 

[robert roman]

There is a process that can be used to help identify and choose property for retail development like carwash.

Typically, analysts begin by examining evidence of public need for a new retail store. For instance, is there an unmet demand for carwash services and will the new wash be reasonably convenient and useful to the public?

These questions are answered in part by evaluating location/site characteristics and surroundings and establishing the property’s positioning within the competitive environment. The results from this work are then used for public need analysis.

Typically, analysts draw conclusions regarding accommodation of public need by evaluating business model, estimating total market potential, examining the store’s consumer characteristics and estimating the property’s usage.

Implicit in this is determining market segment concentrated, total amount of possible sales in the market and supportable number of stores. If the market is underserved, there are methods that can be used to determine the customer base.

Methods used to develop and calibrate location models for sales forecast vary from simple analogy forecasts (i.e. capture rate) to complex (i.e. spatial interaction) which may incorporate dependence models (gravitational or logit) and many variables. Some analysts also make use Voronoi diagrams and geographical information systems.

Of these methods, capture rate is the simplest but by far the weakest (statistically) and presents the greatest risk for misuse.

The findings of location/site and public need analysis should demonstrate there is sufficient unmet demand for carwash, the segment is strong, there would be a high propensity to buy and consumers would find advantage sufficient to merit a trip to the wash.

Unfortunately, it is not possible to reach these conclusions based on short-cuts like the expectation of anywhere from .5%-1.5% of traffic counts and population size.