Why the catchment area often changes the entire result
In merger analysis, a market share only means something if the geographic perimeter is credible. If the area is too broad, shares become artificially diluted. If it is too narrow, the analysis can overstate competitive proximity and produce numbers that look sharper than they really are.
The point is not to find a perfect area, but a coherent one that reflects actual customer behaviour. That means making the transport mode, travel-time assumption, commercial density and nature of comparable outlets explicit.
- state the transport mode used
- document the travel-time assumption
- justify the competitors included in the area
Building a defendable perimeter
A robust method starts from the target outlet or the acquirer-target pair and then generates a consistent catchment area. Isochrones are often more realistic than a radius because they model actual access time rather than theoretical distance.
But the geographic tool alone is not enough. Once the area is defined, it still has to be checked against the market under review: grocery, DIY, garden retail or another segment. Not every nearby outlet is competitively relevant from a demand-side perspective.
Choosing the right competitors
The calculation becomes fragile as soon as overly heterogeneous formats are mixed. A convenience store, a hypermarket and a specialist retailer may be geographically close without exerting the same competitive pressure. Competitor selection therefore has to stay economic, not merely geographic.
This is also where traceability matters most. If a competitor is excluded, grouped or reclassified, the reasoning should remain visible. Clean methodology is more valuable than exhaustive but poorly curated data.
- group banners when it makes economic sense
- remove duplicates and geographic false positives
- document sensitive methodological exclusions
Making the output useful for decision-making
A useful local market share is more than a percentage. It should make before-and-after logic visible, highlight the combined share and isolate the target contribution. Without that structure, the number remains descriptive but not very actionable.
The best output combines a map, a calculation table and visible assumptions. That is what makes the result easy to share internally, understandable for clients and easier to defend in a filing or pre-notification context.