Cannibalization is a concept in the retail industry related to opening new store locations. Cannibalization often occurs when a retailer opens a new store location in close proximity to an existing store and the existing store location loses customers to the new store. The retail company is still making sales to this customer, but the older store's sales have declined at the cost of an increase in the new store.
Cannibalization is a risk of opening new stores, but retailers will take this risk if they believe their total sales will increase as a result of the new store's openings, meaning the new store brings in customers who had not been previously shopping at the old store.
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