Competitor Proximity Cost Calculator

A nearby competitor cannibalizes a share of existing tenant sales.

Tenant annual sales

Distance (miles)

Expected sales drop %

Years remaining

Profit margin %

Total profit impact

$300,000

Annual sales loss

$500,000

Annual profit loss

$50,000

How the math works

Annual loss = sales × drop %. Profit = loss × margin. Total = profit × years.

$5M × 10% = $500k sales loss. × 10% margin = $50k/yr × 6 = $300k total profit impact.

How to Use

Enter tenant sales.
Enter distance to competitor (miles).
Enter expected sales drop %.
Enter lease years remaining.
Enter tenant profit margin %.
Read profit impact.

Frequently Asked Questions

Typical cannibalization rates?

Within 1 mile: 15-30% sales drop. 1-3 miles: 5-15%. 3-5 miles: 2-8%. 5+ miles: minimal impact. Dense urban markets cannibalize less per mile; suburban stretches more. Actual rates depend heavily on retail category and customer loyalty.

Retail categories?

Grocery: high cannibalization (convenience-driven). Home improvement: moderate (destination). Department stores: low (experience-driven). Restaurants: extreme cannibalization of same-concept stores. Fashion: moderate. Health clubs: very high (membership-based).

Mitigation?

Exclusive use clauses in lease. Radius clauses preventing tenant self-cannibalization. Market monitoring — early lease re-negotiation if competitor announced. Co-tenancy clauses triggering rent reduction if anchor competitor opens.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.