(edited)
How to estimate the retail market size in the US
Overview of answers
Upvotes
Best answer
For a simple calculation that should suffice in a stressful case interview, multiply population by disposable income/capita (or GDP/capita if you're desperate) and multiply that by a percentage of income that the average person seems likely to spend on retail every year (e.g. 33%?).
i.e. 300m * $40k * 0.33 = 4 trn
- which actually gets you pretty close to the ~4.5 trn spent on retail in the US last year. You'd get 5 trn from GDP per capita figures (~$50k/p.c.), so that would be an alright guess as well.
(edited)
Was this answer helpful?
I would bottom up calculation in the following way
- Average income/Household
- Exclude avrg tax, insurance, loans etc. from income
- Exclude other expenses
- In the end, you have money that household would spend on retail PA
- Multiply it by the number of households in US
Of cause this calculation would not give you an exact figure however probably you would have an order of magnitude
What do you think? Does it make sense?
Was this answer helpful?
1. define retail and unit of measurement, let's say overall spending on an annual basis.
2. MS= # people * disposable income/person/year * retail spending% + non-personal spending on retail + tourists
3. 3 segments of people: high income/ mid income/low income. Each has different disposable income and retail spending%.
4. assign percentages to non-personal retail spending and tourists.
Please let me know what you think.
Was this answer helpful?
Related Cases
Company case by Oliver Wyman
Style:
Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise
...
Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below
...
(Open whole case)
117.9k
Times solved
Intermediate
Difficulty
Company case by Bain & Company
Style:
You have inherited the “Old Winery” from your grandfather, a winery that has been family-owned for five generations and can be dated back to the 16th century.Half of the eleven hectares are used to grow white grapes, the other half to grow red grapes. They are grown in a conventional way, i.e. they
...
You have inherited the “Old Winery” from your grandfather, a winery that has been family-owned for five generations and can be dated back to the 16th century.Half of the eleven hectares are
...
(Open whole case)
112.6k
Times solved
Intermediate
Difficulty
Company case by Roland Berger
Style:
Onlinestar, an online retailer of furniture and garden products (core business), has grown significantly in recent years as a result of an expansion of its product portfolio. The company mainly imports goods from Chinese manufacturers but also operates its own production of cat lavatories (special b
...
Onlinestar, an online retailer of furniture and garden products (core business), has grown significantly in recent years as a result of an expansion of its product portfolio. The company mai
...
(Open whole case)
88.1k
Times solved
Intermediate
Difficulty
Company case by RWE Consulting
Style:
RWE has reliably supplied people and companies with electricity for more than 120 years with activities around the world with a clear focus on growth. The company is pushing the energy transition to climate neutrality with focus on renewable energy sources like offshore or onshore wind as well as ph
...
RWE has reliably supplied people and companies with electricity for more than 120 years with activities around the world with a clear focus on growth. The company is pushing the energy trans
...
(Open whole case)
14.4k
Times solved
Intermediate
Difficulty
Company case by DB Management Consulting
Für Unternehmen ergeben sich durch die Digitalisierung neue Chancen und Risiken. Neue Märkte mit großem Potenzial können erschlossen werden – gleichzeitig erhöhen Wettbewerber den Konkurrenzdruck. KMUs, Start-ups und Konzerne bringen unterschiedliche Kompetenzen und finanzielle Möglichkeiten mi
...
Für Unternehmen ergeben sich durch die Digitalisierung neue Chancen und Risiken. Neue Märkte mit großem Potenzial können erschlossen werden – gleichzeitig erhöhen Wettbewerber den Konku
...
(Open whole case)
12.8k
Times solved
Intermediate
Difficulty