How Location Intelligence improves trade area coverage during retail mergers and acquisition

Amazon's acquisition of Whole Foods led to record-breaking merger and acquisition activity among competitors, with U.S.-based deals valued at $1.03 trillion dollars in the first half of 2018. The Target-Kroger merger scenario was simulated using Location Intelligence to identify stores for consolidation and minimize sales cannibalization risks while increasing trade area coverage. Spatial analysis revealed that nearby locations assume randomness in data distribution, but consumer spending patterns are influenced by contextual factors such as population density and transportation modes. Calculating travel time isolines helped identify stores with high trade area overlap, resulting in 420 Kroger stores being prioritized for consolidation. The merger would increase Target's trade area coverage nationwide by 86% while reducing Kroger's footprint, providing customers with a larger selection of merchandise and inventory using Target's existing infrastructure.