Studying local competition: sources and method

Establishment, company, legal entity: three different objects

A company may run several establishments; a legal entity in the commercial register may run no point of sale at all; a point of sale may belong to a company domiciled in another canton. Counting legal entities instead of points of sale gives a result unrelated to real competition.

For a retail business, the relevant unit is the establishment: one place, one address, one activity.

Structural business statistics

This is the reference census of establishments and jobs in Switzerland, classified by activity and available at a fine geographical mesh. It is the only source that is exhaustive and comparable across the whole country.

Its two limits follow from its nature: it is published with a lag of a few years, and its fine mesh is subject to statistical confidentiality, which masks sparsely populated cells. It therefore gives a solid but not instantaneous picture of the retail fabric.

The commercial register

It gives registrations, deletions, legal forms and registered office addresses. It is the best source for the history of an address and for recent dynamics: successive deletions at one and the same address tell a story that averages do not show.

On the other hand it says nothing about the actual activity or turnover, and it ignores sole proprietorships below the compulsory registration threshold — that is, a significant share of small shops and services.

Collaborative mapping data

They bring what the other two lack: the exact position, the shop name, often the opening hours, and far better freshness in urban areas. Their weakness is uneven coverage — excellent in city centres, patchy in rural municipalities.

Cross-checked with official statistics, they make it possible to tell a statistical void from a real one.

Three sources that diverge are not a problem: the gap between them is what is informative. A municipality where the register records three shopfronts and the map only one deserves a visit before any conclusion.

Density as a benchmark, not a verdict

Relating the national number of establishments in an activity to the Swiss population gives a ratio of inhabitants per establishment. Applied to a municipality, it indicates how many establishments it would have if it were average. A useful benchmark and a poor verdict: competition is never spread evenly, and a municipality may be structurally over-supplied because it draws in its neighbours.

The gap between the theoretical number and the number actually observed is the interesting information — in both directions. An apparent shortfall may signal an opportunity, or a reason everyone knows.

Dynamics: creations, closures, survival

A stable stock of establishments can hide complete renewal. Business demography statistics give creations and closures by municipality, and three- and five-year survival rates by sector.

Those survival rates are the most useful and the most ignored figure in a market study: they set the base rate against which every business plan must compare itself.