Montreal Grocery Store Entry Decision and Self-Checkout vs Staffed Lane Mix

A large Canadian grocery chain wants to open its first store in Montreal. Should it go ahead, and if it does, what mix of self-checkout kiosks and staffed checkout lanes should the store have? ### Clarifying Questions - Is the chain a discount, mainstream or premium grocer, and does it already run stores elsewhere in Quebec or only in other provinces? - What format is planned: a large suburban supermarket for weekly shopping, or a smaller urban store for frequent top-up trips? - What would make the move worthwhile for the company: a payback target for this one store, or a foothold for expanding across Quebec? - Does the ratio refer to the checkout points installed, or to how many of each are open at the busiest time? ### Part 1 — Decide whether to enter Montreal Recommend whether the chain should open the store, and explain what the decision depends on. ```hint Find the right to win Montreal already has plenty of grocery stores, so demand alone does not settle it. Ask what this chain would offer that local shoppers lack, and what is different about operating in Quebec. ``` #### What This Part Should Cover - Market attractiveness: size of demand, the competitors already there, and the chain's advantage over them. - Costs and risks particular to entering Quebec, such as French-language requirements, supply and distribution, and real estate. - A clear recommendation, with the conditions or evidence that would change it. ### Part 2 — Estimate the checkout mix If the store opens, estimate how many self-checkout kiosks and staffed lanes it needs, and state the resulting ratio. ```hint Size the busiest hour Checkout capacity is set by the peak, not the daily average. Estimate transactions in the busiest hour, how many each type of checkout can handle, and which shoppers each type suits. ``` #### What This Part Should Cover - A peak-hour transaction estimate built from labeled assumptions. - Throughput of a kiosk and of a staffed lane, and the share of shoppers suited to each. - The arithmetic to a lane count and ratio, a sanity check, and the factors that would move it. ### What a Strong Answer Covers - A decision in Part 1 rather than a list of considerations, with the evidence that would reverse it. - Assumptions stated as assumptions, with round numbers and correct arithmetic. - A checkout mix that follows from the store format and shoppers chosen in Part 1. - Operating trade-offs such as labor cost, theft at self-checkout, accessibility and customer experience. - How the chain would check its estimates once the store is open. ### Follow-up Questions - Losses from unscanned items at the self-checkouts run well above plan after opening. What do you change? - How would the ratio differ between a small downtown store near a metro station and a large suburban store? - If the chain is not ready to commit to a full store, how could it test demand in Montreal first?