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What kind of calculation goes into leasing something for 750k/year to keep competition away? Is it as simple as thinking that a competing store would cost them
by Eextra953 2y ago
What kind of calculation goes into leasing something for 750k/year to keep competition away? Is it as simple as thinking that a competing store would cost them 750k/year or do other factors go into this?
Also, the mayor expressed his frustration but there is a lot that local government can do to combat this kind of thing. Even something as simple as getting a weekly farmers market started or actively looking for small time grocers would help. I think the mayor doesn't want to push too hard for whatever reason.
- sokoloff 2y agoIf it would cost $10M to build and open a new grocery store on an unimproved lot, that's only a 7.5% rate of return to force your competition to lay out $10M to open a store, at which point, you could probably convert your lease into an operating store for around $1M or less of capital and compete to ensure that they could never show a positive return on the overall move.