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Site Selection: Retail Management: A Strategic Approach

The document discusses factors to consider when selecting retail store locations. It examines three types of locations - isolated stores, unplanned business districts, and planned shopping centers. For each location type, it outlines advantages and disadvantages. When evaluating specific sites, the document emphasizes considering pedestrian and vehicular traffic, parking availability and quality, corner influence, and lease terms and costs. The optimal site is one with high traffic and accessibility.

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430 views

Site Selection: Retail Management: A Strategic Approach

The document discusses factors to consider when selecting retail store locations. It examines three types of locations - isolated stores, unplanned business districts, and planned shopping centers. For each location type, it outlines advantages and disadvantages. When evaluating specific sites, the document emphasizes considering pedestrian and vehicular traffic, parking availability and quality, corner influence, and lease terms and costs. The optimal site is one with high traffic and accessibility.

Uploaded by

rachealll
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Site Selection

RETAIL MANAGEMENT: A STRATEGIC APPROACH


11th Edition BERMAN EVANS

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-1 1

Chapter Objectives
To thoroughly examine the types of

locations available to a retailer: isolated stores, unplanned business districts, and planned shopping centers
To note the decisions necessary in choosing

a general retail location


To describe the concept of one-hundred

percent location
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-2 2

Chapter Objectives (cont.)


To discuss several criteria for evaluating

general retail locations and the specific sites within them


To contrast alternative terms of occupancy

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-3 3

Overview
Step 1: investigate alternative trading

areas (Chapter 9) Step 2: determine what type of location is desirable Step 3: select the general location Step 4: evaluate alternative specific store sites

Chapter 10 discusses steps 2-4.


Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-4 4

Three Types of Locations


Isolated Store Planned Shopping Center Unplanned Business District
Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-5 5

Isolated Stores
Advantages * No competition * Low rental costs * Flexibility * Good for convenience stores * Better visibility * Adaptable facilities * Easy parking Disadvantages * Difficulty attracting customers * Travel distance * Lack of variety for customers * High advertising expenses * No cost sharing * Restrictive zoning laws
10-6 6

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Examples of Isolated Stores


Large-store formats
Wal-Mart Costco

Convenience stores
7-Eleven

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-7

Figure 10-1: Site Selection and Starbucks

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-8 8

Unplanned Business Districts


Secondary Business District

Central Business District Neighborhood Business District

String

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-9 9

Figure 10-2: A Revitalized Central Business District

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-10

Figure 10-3: Unplanned Business Districts and Isolated Locations

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-11

Planned Shopping Centers


Advantages
* Well-rounded * * * * *

Disadvantages
Limited flexibility Higher rent Restricted offerings Competition Requirements for association memberships * Too many malls * Domination by anchor stores
* * * * *
10-12

assortments Strong suburban population One-stop, family shopping Cost sharing Transportation access Pedestrian traffic

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Figure 10-4: Macys and Shopping Centers

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-13

Table 10-1a: Characteristics of Centers


Features
Total site area Total sq. ft. leased Principal tenant Number of stores Minimum # of people in trading area Driving time of trading area Location

Regional Center
30-100+ 400,001-2,000,000+ 1+ department stores 50-150 or more 100,000+ Up to 30 minutes Outside central city on highway
10-14

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Table 10-1b: Characteristics of Centers


Features
Total site area Total sq. ft. leased Principal tenant Number of stores Minimum # of people in trading area Driving time of trading area Location

Community Center
10-40+ 100,001-400,000 Supermarket or drug store 5-15 3,000-50,000 Fewer than 15 minutes In a single residential area
10-15

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Table 10-1c: Characteristics of Centers


Features
Total site area Total sq. ft. leased Principal tenant Number of stores Minimum # of people in trading area Driving time of trading area Location

Neighborhood Center
3-15+ 300,000-100,000 Branch department store 15-25 or more 20,000-100,000 Up to 20 minutes Close to a populated residential area
10-16

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Figure 10-5: Festival Walk, Hong Kong

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-17

Location and Site Evaluation

One-Hundred Percent Location

The optimum site for a particular store

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-18

Figure 10-7: Location/Site Evaluation Checklist

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-19

Pedestrian Traffic
The most crucial measures of a location/sites

value are the number and type of people passing by. Proper pedestrian traffic count should include:
age and gender (exclude very young children) count by time of day pedestrian interviews spot analysis of shopping trips

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-20

Vehicular Traffic
Important for convenience stores outlets in regional shopping centers car washes suburban areas with limited pedestrian traffic

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-21

Parking Considerations
Number and quality of spots Distance of spots from stores

Availability of employee parking


Price to charge customers for parking

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-22

How Many Parking Spaces?


Shopping centers = 4-5 spaces per 1000

square feet of gross floor space Supermarkets = 10-15 spaces per 1000 square feet of gross floor space Furniture stores = 3-4 spaces per 1000 square feet of gross floor space

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-23

Figure 10-8: Corner Influence and Hersheys

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-24

Terms of Occupancy Considerations


Ownership versus leasing Type of lease Operations and maintenance costs Taxes Zoning restrictions Voluntary regulations

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-25

Types of Leases
Straight MaintenanceIncrease Recoupment

Percentage

Graduated

Net

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-26

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

10-27

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