Retail Management: A Strategic Approach: CC CC

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
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
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. 2Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall
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Three Types of Locations

Isolated Store Planned Shopping Center Unplanned Business District
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
Examples of Isolated Stores

y Large-store formats
y Wal-Mart y Costco
y Convenience stores
y 7-Eleven
10-7
Figure 10-1: Site Selection and Starbucks
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Unplanned Business Districts

Secondary Business District
Central Business District Neighborhood Business District
String
10-9 9
Figure 10-2: A Revitalized Central Business District
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Figure 10-3: Unplanned Business Districts and Isolated Locations
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A central business district (CBD) is the hub of retailing in a city, and is synonymous with the term downtown. strength
y Product assortment y Access to public transportation y Variety of store types and y y
weaknesses
y Inadequate parking, and traffic
positioning strategies y Wide range of prices y Variety of customer services y Pedestrian traffic
y y y
and delivery congestion Travel time for suburbanites Frail condition of some cities (e.g., aging stores) compared with their suburbs Poor image to potential consumers High rents and taxes Relocation of stores to suburbs
12
A secondary business district (SBD) is an unplanned shopping area in a city or town that is usually bounded by the intersection of two major streets. Strength
y Product assortment y Access to public
Weaknesses
y Discontinuity of offerings y High rent and taxes y Traffic and delivery
transportation y Less crowding y More personal service y Location near residential areas
congestion y Aging facilities y Parking difficulties y Fewer chain outlets
13
A neighborhood business district (NBD) is an unplanned shopping area that appeals to the convenience shopping and service needs of a single residential area. Advantages
y Good location y Long store hours y Good parking y Less hectic atmosphere
Disadvantages
y Limited selection y Higher prices
14
A string is an unplanned shopping area comprising a group of retail stores, often with similar or compatible product lines, located along a street or highway. Advantages
y Lower rent y More flexibility y Better road visibility and
Disadvantages
y Less product variety y Increased travel time y Higher advertising costs y Zoning restrictions y The need to build premises y Competition y Less control over prices and
parking y Lower operating costs y More traffic y Some sharing of common costs
less loyalty
15
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
* * * * *
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assortments Strong suburban population One-stop, family shopping Cost sharing Transportation access Pedestrian traffic
Figure 10-4: Macy s and Shopping Centers
10-17
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 enter
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
10-18
Table 10-1b: Characteristics of Centers

Features
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
10-19
Table 10-1c: Characteristics of Centers

Features
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
10-20
Figure 10-5: Festival Walk, Hong Kong
10-21
Location and Site Evaluation
One-Hundred Percent Location
The optimum site for a particular store
10-22
Figure 10-7: Location/Site Evaluation Checklist
10-23
Pedestrian Traffic
The most crucial measures of a location/site s 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
10-24
Vehicular Traffic
y Important for convenience stores outlets in regional shopping centers car washes suburban areas with limited pedestrian traffic
10-25
Parking Considerations
Number and quality of spots Distance of spots from stores Availability of employee parking Price to charge customers for parking
10-26
How Many Parking Spaces?

y Shopping centers = 4-5 spaces per 1000
square feet of gross floor space y Supermarkets = 10-15 spaces per 1000 square feet of gross floor space y Furniture stores = 3-4 spaces per 1000 square feet of gross floor space
10-27
Figure 10-8: Corner Influence and Hershey s
10-28
Terms of Occupancy Considerations

y Ownership versus leasing y Type of lease y Operations and maintenance costs y Taxes y Zoning restrictions y Voluntary regulations
10-29
Types of Leases
Straight MaintenanceIncrease Recoupment
Percentage
Graduated
Net
10-30
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.
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Site Selection

RETAIL MANAGEMENT: A STRATEGIC APPROACH

Chapter Objectives (cont.)

Three Types of Locations

Examples of Isolated Stores

Figure 10-1: Site Selection and Starbucks

Unplanned Business Districts

Central Business District Neighborhood Business District

Figure 10-2: A Revitalized Central Business District

Figure 10-3: Unplanned Business Districts and Isolated Locations

congestion y Aging facilities y Parking difficulties y Fewer chain outlets

Planned Shopping Centers

Figure 10-4: Macy s and Shopping Centers

Table 10-1a: Characteristics of Centers

Table 10-1b: Characteristics of Centers

Table 10-1c: Characteristics of Centers

Figure 10-5: Festival Walk, Hong Kong

Location and Site Evaluation

One-Hundred Percent Location

The optimum site for a particular store

Figure 10-7: Location/Site Evaluation Checklist

How Many Parking Spaces?

Figure 10-8: Corner Influence and Hershey s

Terms of Occupancy Considerations

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