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Retail Site Selection: Presented By: Nitin Yadav PA 9035

This document discusses key considerations for retail site selection, including issues, steps, and factors to evaluate. The main issues are consumer choice, competitive advantage, trends, investment, location availability, and legal restrictions. The key steps are evaluating specific areas, number of stores in an area, and individual site characteristics. Important factors for evaluating specific areas and sites include economic conditions, competition, population strategic fit, costs, traffic flow, accessibility, location characteristics, trade area demographics and potential sales. Legal restrictions and trade area analysis are also important considerations for optimal retail site selection.

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274 views19 pages

Retail Site Selection: Presented By: Nitin Yadav PA 9035

This document discusses key considerations for retail site selection, including issues, steps, and factors to evaluate. The main issues are consumer choice, competitive advantage, trends, investment, location availability, and legal restrictions. The key steps are evaluating specific areas, number of stores in an area, and individual site characteristics. Important factors for evaluating specific areas and sites include economic conditions, competition, population strategic fit, costs, traffic flow, accessibility, location characteristics, trade area demographics and potential sales. Legal restrictions and trade area analysis are also important considerations for optimal retail site selection.

Uploaded by

nitin_chotu
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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RETAIL SITE SELECTION

Presented By:
Nitin Yadav
PA 9035
Issues to be considered in site selection
Consumer choice
Needs for competitive advantage
Considerations of trends
Investment
Availability of locations
Legal restrictions
Length of agreement(if on lease)
Steps in site selection
Evaluating the specific areas for location.

Number of stores in an area.

Evaluating a site for locating a retail store.


Evaluating specific areas for locations
Economic conditions.

Competition.

Strategic fit for area’s population.

Operating costs.
Number of stores in area
Economies of scale from multiple stores.

Cannibalization.
Evaluating a site for locating a retail
store
In making this decision, retailers consider the following
three factors:
The characteristics of the site.
Trading area characteristics.
The estimated potential that can be generated by a
store at the site.
Site characteristics
 The traffic flow past and accessibility to the site.

 The characteristics of the location.

 The costs associated with locating at the site.


Traffic flow and accessibility
Vehicular traffic
Ease of vehicular traffic.
Access to major highways.
Street congestion.
Pedestrian traffic.
Availability of mass transit.
Location characteristics
Parking spaces.
Access to store entrance and exit.
Visibility of store from street.
Access for deliveries.
Size and shape of store.
Condition of building.
Adjacent retailers.
Cost factors
Terms of lease/rent agreement.
Basic rent payments.
Length of lease.
Local taxes.
Operating and maintenance costs.
Restrictive clauses in lease.
Membership in local merchants association required.
Legal Considerations
Environmental conditions.
Zoning restrictions.
Building codes.
Signs.
Licensing requirements.
Local Demographics
Population and/ or household base
Population growth potential.
Lifestyle of consumers.
Income Potential.
Age makeup.
Population of nearby special markets, that is day time
workers, students and tourists, if applicable.
Trade area characteristics
A trade area is a contiguous geographic area that
accounts for the majority of a store’s sale and
customers.
Trade area can be divided into three zones:
Primary trading area is the geographic area from which
the shopping center or store site drives 50-70% of its
customers.
Secondary trading area is the geographic area of
secondary importance in terms of customer sales,
generating about 20-30% of the site customers.
Contd…
Tertiary trading area or fringe includes the remaining
customers who shop at the site but come from widely
dispersed areas.
Factors affecting the size of trade area
The actual boundaries of a trade area are determined
by the store’s accessibility, natural and physical
barriers and level of competition.
The boundaries are also affected by the type of
shopping area and shop store.
Trade area size is influenced by the type of store or
shopping area. For eg : Wal-Mart supercenter in a rural
area might draw customers from 30 miles away.
Contd…
The size the trading area is determined by the nature of
the merchandise sold, assortment offered and location
the alternative sources for the merchandise.
Measurement of trade area for a retail
store
Retailers can determine the trade area for their existing
stores by customer spotting.
Customer spotting is the process of locating the
residences of customers for a store on a map and
displaying their positions relative to the store location.
The address for locating the customers residences
usually are obtained by asking the customers,
recording the information from internet purchases
Sources of information about the trade
area
Data published by the Census Bureau
Geographic Information System (GIS) Suppliers: It is
a system of hardware and software used to store,
retrieve, map and analyze geographic data, along with
the operating personnel and the data that goes into the
system.
Estimating potential sales for a store site
Huff Gravity Model

Regression analysis

Analog approach

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