Hi, below is one approach to get to this number for sales in one particular outlet

I will assume that the main purchases are 2-fold - 1. Sports equipment and 2. Sports clothing

To get overall market size :

• Estimate population of the city
• Divide into individual age brackets assuming uniform distribution
• Estimate % that play sports of some kind by age :
  • Almost all children 6-18 can be assumed to play sports of some kind; for college (18-22) this number should drop by 60% or so and for adults maybe 20-30% play sports regularly
• Now assume that for children they need new gear at least once a year as they grow out of equipment fast
• Adults this can be once in 2 years or less, anything is reasonable if you can explain it
• Now to make it simple assume some sort of an average price for the spend, let's say $100 for children each time and $250 for adults each time
• Multiply the two to get an initial estimation

For sports clothes

• Next, estimate the % that go to gym or do outdoors physical activity that requires gear
  1. Relevant for all children <18 - assume 10%
  2. College assume 40%-60% or so
  3. Adults - need country context but say 20% to 40% do some sort of regular physical activity
• Make assumptions on how often you need new gear for these activities - I would use the same as for sports gear
• Assume some sort of avg price , say $100 for children, $200 for adults
• Multiply the two to get the estimation

• Add both the numbers to get total market size for sports gear and clothes
• Next get market share of this chain (If it is a dominant chain you can assume 30 to 60% depending on the context you have)
• Multiply market size by this above percentage to get sales for the chain in question
• Divide revenue by number of stores
• This should give you annual sales for one store (with the assumption that sales are equally distributed)

To make it more realistic you can get separate market shares for sports goods vs sports clothes as people shop for those two things very differently

Hope this helps,
Udayan

(editiert)

Hi there,

Providing some market sizing thinking for anyone revisiting this Q&A:

Remember that there's rarely a "best" answer with market sizing. What's important is that you break down the problem the way it makes sense to you. Importantly, break it down so that the assumptions you make are the ones you're most comfortable in.

For example, do you know all the major brands? Great go with that. Do you understand all the segments of that country's population (either age or wealth or job breakdown)? Go with that. Do you know the total market size of the tourism (or hotel) industry? Then break it down that way.

Some tips:

1. Just like in a case, make sure you understand the question - what are you really being asked to calculate
2. Decide whether a top-down or bottom-up approach is best
3. Figure out what you know you know, and what you know you don't know, but could estimate
   1. This helps you determine how to split out buckets
4. Stay flexible - you can start with a "high-level" market sizing, but gauge your interviewers reaction....if it looks like they want you to do more...then go along level deeper in terms of your splits