Buying Power Index (BPI)

Definition

Buying Power Index (BPI) is a weighted index that converts three basic elements—population, effective buying income, and retail sales—into a measurement of a market’s ability to buy.

It indicates the percentage of total US retail sales occurring in a specific geographic area and is used to forecast demand for new stores and to evaluate the performance of existing stores.[1]

 

References

  1. ^ American Marketing Association, AMA Dictionary.

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