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Burton <br />IDentifying Customers. <br />Retail Leakage and Surplus Analysis <br />The Retail Leakage and Surplus Analysis examines the quantitative aspect of the community's retail opportunities. It is a <br />guide to understanding retail opportunities but it is not an analysis that indicates unconditional opportunities. The analysis <br />is sometimes called "a gap analysis" or "a supply and demand analysis" and can aid in the following: <br />' Indicating how well the retail needs of local residents are being met <br />' Uncovering unmet demand and possible opportunities <br />' Understanding the strengths and weaknesses of the local retail sector <br />' Measuring the difference between actual and potential retail sales <br />Understanding Retail Leakage <br />Retail leakage means that residents are spending more for products than local businesses capture. Retail sales leakage <br />suggests that there is unmet demand in the trade area and that the community can support additional store space for that <br />type of business. <br />However, retail leakage does not necessarily translate into opportunity. For example, there could be a strong competitor in <br />a neighboring community that dominates the market for that type of product or store. <br />Understanding Retail Surplus <br />A retail surplus means that the community's trade area is capturing the local market plus attracting non -local shoppers. A <br />retail surplus does not necessarily mean that the community cannot support additional business. Many communities have <br />developed strong clusters of stores that have broad geographic appeal. Examples of these types of retailers include: <br />sporting goods stores, home furnishing stores, restaurants, and other specialty operations that become destination <br />retailers and draw customers from outside the trade area. <br />Examining the quantitative aspects (Leakage/Surplus) is only part of the evaluation of community's retail opportunities. <br />Before any conclusions can be drawn about potential business expansion or recruitment opportunities, qualitative <br />considerations such as trade area psychographics and buying habits must be analyzed in context of other market factors. <br />