Retail Site Selection 101: The Art and the Science Peter Dugan and Jim Hornecker Sites discussed in this presentation are not under consideration by Cub Foods or SuperValu. The Silk Road, ca. 1215-1360 CE Source: Miami University Silk Road Project, http://montgomery.cas.muohio.edu:16080/silkroad/index.html CB Richard Ellis | Page 2 The Silk Road: Malatya Malatya, Turkey- Home to the Taş Han Caravanserai, a 13th century Han or caravansarai CB Richard Ellis | Page 3 Taş Han Caravansarai: An Early Mixed-Use Site (Then) CB Richard Ellis | Page 4 Taş Han Caravansarai: An Early Mixed-Use Site (Now) CB Richard Ellis | Page 5 Modern Malatya CB Richard Ellis | Page 6 Introduction to SuperValu CB Richard Ellis | Page 7 Constant Change in the Grocery Industry Top 10 U.S. Food Retailers by Sales Rank 1986 1996 2006 1 Safeway Kroger Wal-Mart 2 Kroger Safeway Kroger 3 American Stores Albertsons Safeway 4 Winn-Dixie American Stores SUPERVALU 5 A&P Winn-Dixie Costco 6 Lucky Stores Publix Ahold USA 7 Albertsons A&P Publix 8 Supermarkets Gen. Food Lion Delhaize America 9 Publix Wal-Mart H.E. Butt 10 Vons Companies Costco Albertsons, LLC CB Richard Ellis | Page 8 Twin Cities Grocery Market and Cub Foods = #1 CB Richard Ellis | Page 9 Site Selection 101 Fundamentals Macro Micro/Site Specific Intangibles CB Richard Ellis | Page 10 Prairie Village – Demographic Overlay Sites discussed in this presentation are not under consideration by Cub Foods or SuperValu. CB Richard Ellis | Page 11 Prairie Village – Demographic Overlay Demographics Radius Polygon Households 22,554 20,353 Median HH Income $92,023 $91,834 Average HH $119,860 $122,305 Income Primary Ages 35-44 35-44 Median Age 36.23 35.89 Education (% with 63.7% 64.9% college degree) Sites discussed in this presentation are not under CB Richard Ellis | Page 12 consideration by Cub Foods or SuperValu. Prairie Village - Aerial Sites discussed in this presentation are not under consideration by Cub Foods or SuperValu. CB Richard Ellis | Page 13 Prairie Village – Site Plan Sites discussed in this presentation are not under consideration by Cub Foods or SuperValu. CB Richard Ellis | Page 14 Peter’s Pizzeria CB Richard Ellis | Page 15 CBRE Retail Site Selection Group (RSSG) Who is the Retail Site Selection Group? A team of analysts founded on the premise that retail business is about the customer Customer Segmentation • Claritas’ Prizm NE System Customer Profiles • Syndicated Profiles from MRI and Simmons • Client Point-of-Sale file CB Richard Ellis | Page 16 Profile Comparison - Sample CB Richard Ellis | Page 17 Profile Comparison – Top 5 Segments CB Richard Ellis | Page 18 Prizm Segmentation – Top 5 Segments 1 - Upper Crust • Empty-nest couples 55+ • Highest concentration of $200K+ incomes and postgraduate degrees 3 - Movers & Shakers • Up-and-coming business class • Suburban, dual-income couples, highly educated • Mostly between ages 35-54, often with kids 6 - Winner’s Circle • 25-34 year old couples with large families in new money subdivisions • Median income of nearly $90,000 CB Richard Ellis | Page 19 Prizm Segmentation – Top 5 Segments 7 - Money and Brains • High incomes, advanced degrees • Citydwellers, predominantly white with high concentration of Asian-Americans • Many are married couples with few children, living in fashionable homes 18 - Kids & Cul-de-Sacs • Upscale, suburban, married couples with large families • High rate of Hispanics and Asian-Americans • Primarily college-educated, white-collar professionals CB Richard Ellis | Page 20 Percent Composite Bar Chart CB Richard Ellis | Page 21 Percent Composite Bar Chart- Top 5 CB Richard Ellis | Page 22 Index Bar Chart CB Richard Ellis | Page 23 Index Bar Chart- Top 5 CB Richard Ellis | Page 24 Profile Game Plan CB Richard Ellis | Page 25 Profile Game Plan- Top 5 CB Richard Ellis | Page 26 Profile Game Plan – Quadrant 1 CB Richard Ellis | Page 27 Profile Game Plan – Quadrant 2 CB Richard Ellis | Page 28 Profile Game Plan – Quadrant 3 CB Richard Ellis | Page 29 Profile Game Plan – Quadrant 4 CB Richard Ellis | Page 30 Prairie Village – Heat Map CB Richard Ellis | Page 31 Market Potential Index (MPI) - Minneapolis CB Richard Ellis | Page 32 MPI Quintiles- Minneapolis CB Richard Ellis | Page 33 MPI - Duluth CB Richard Ellis | Page 34 MPI- Duluth CB Richard Ellis | Page 35 MPI Quintiles- Duluth CB Richard Ellis | Page 36 MPI- Rochester CB Richard Ellis | Page 37 MPI- Rochester CB Richard Ellis | Page 38 MPI Quintiles- Rochester CB Richard Ellis | Page 39 MPI Analysis % Above Potential Households Total # of National Based on Profile of Peter’s Market Households Average Pizzeria Minneapolis 1,237,926 79.61% 985,512 Duluth 33,228 46.40% 15,418 Rochester 45,797 80.00% 36,638 CB Richard Ellis | Page 40 Rank Order Correlation CB Richard Ellis | Page 41 Site Selection: The Good Southdale, 1956 and today CB Richard Ellis | Page 42 Site Selection: The Bad © ananova.com CB Richard Ellis | Page 43.