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A GUIDE TO RETAIL IMPACT STUDIES Forecasting Sales by Line of Goods in the Proposed Store Once the composition of the store is identified, the analyst should then proceed to estimate the sales of each line of goods to be offered by the proposed retailer. Methodologies here may vary. The process often involves determining how much space the store will devote to each line of goods and what the sales per square foot will be in those categories. The primary source of information is the corporation's Annual Report and the filings required by the Securities Exchange Commission (SEC). In these documents, firms provide an extraordinary range of information about business practices. In addition, investment analysts routinely review the business practices of major retailers. It is from such information that consultants specializing in retail impact analysis develop space allocation and average sales per square foot for particular retailers. The emergence of supercenter retailing has added to the complexity of this task. Until recently, the bulk of grocery sales in a given jurisdiction were easily quantified. However, an increasing share of grocery purchases take place in stores that are reported under other NAICS categories. Corporate average sales per square foot in groceries provide only rough guidance because actual values vary widely by locale depending on local market conditions. This variance plays a significant role in the ongoing reshuffling of markets among the major national and regional grocery chains and is, in turn, affected by that reshuffling. One approach some economic analysts use is to forecast grocery sales in proposed supercenter retailers by applying current sales per square foot in grocery stores for the region to the space to be allocated in the supercenter. In any case, the goal is to forecast sales in the proposed retail store by line of goods. There is no single methodology or data source for such an analysis. Indeed, such forecasts reflect hard- earned, in-house knowledge rather than any formulaic approach to the issue. The analyst must be willing and able to visit examples of the proposed retailer, to procure and review investment analyst reports, and to maintain an ongoing knowledge base about the ever-evolving practices of large-scale retailers. The illustration below represents the proposed space allocation of a hypothetical 66,000 square foot retailer. As you can see, not all 66,000 square feet will be allocated to grocery items as 13,000 square feet is being dedicated to general merchandise and 9,000 square feet to various sales, service, and administrative needs. These square footages are important to note as they will affect the analysis in later stages. 7