Chapter Chapter 1010Site Site SelectionSelection

Chapter ObjectivesChapter Objectives

To examine overall location strategiesTo examine overall location strategies

To elaborate the types of locations To elaborate the types of locations available to a retailer: isolated store, available to a retailer: isolated store, unplanned business district, and planned unplanned business district, and planned shopping centershopping center

To note the decisions necessary in To note the decisions necessary in choosing a general retail locationchoosing a general retail location

To discuss several criteria for evaluating To discuss several criteria for evaluating general retail locations and the specific general retail locations and the specific sites within themsites within them

To contrast alternative terms of To contrast alternative terms of

occupancyoccupancy

LocatioLocation,n,

Criteria to consider Criteria to consider include:include:

• population size and population size and traitstraits

• competitioncompetition• transportation accesstransportation access• parking availabilityparking availability• nature of nearby nature of nearby

storesstores• property costsproperty costs• length of agreementlength of agreement• legal restrictionslegal restrictions

LocatioLocation,n, LocatioLocatio

nn

Choosing a Store Choosing a Store LocationLocation

Chapters 9 and 10Chapters 9 and 10Step 1: Evaluate alternate trading areas in terms of residents and existing retailers -Chapter 9

Step 2: Determine location strategy (e.g., multi vssingle, freestanding vs mall) -Chapter 10

Step 3: Select the location type -Chapter 10

Step 4: Analyze alternate sites contained in the specific retail location type -Chapter 10

Step 2: Determine location strategy (e.g., multi vssingle, freestanding vs mall) -Chapter 10

Multi-store deployment

• Geographic Concentration (Efficiency)• Market Saturation (Sales Maximization)• Second-Use and Secondary Locations (Economy)• Smaller Cities and Towns (Competition Minimization)

Freestanding vs. Shopping Freestanding vs. Shopping CenterCenter

Advantages

vs.

Disadvantages

Three Types of Three Types of LocationsLocations

IsolatedStore

PlannedShopping

Center

UnplannedBusinessDistrict

Step 3: Select the location type -Chapter 10

Isolated StoresIsolated Stores•AdvantagesAdvantages

• No competitionNo competition• Low rental costsLow rental costs• FlexibilityFlexibility• Good for convenience Good for convenience

storesstores• Better visibilityBetter visibility• Adaptable facilitiesAdaptable facilities• Easy parkingEasy parking

DisadvantagesDisadvantages* Difficulty attracting Difficulty attracting

customerscustomers* Travel distanceTravel distance

* Lack of variety for Lack of variety for customerscustomers

* High advertising High advertising expensesexpenses

* No cost sharingNo cost sharing* Restrictive zoning lawsRestrictive zoning laws

Large-store Large-store formatsformats Wal-MartWal-Mart Costco Costco

Convenience storesConvenience stores 7-Eleven7-Eleven

Unplanned Unplanned Business Business DistrictsDistricts

Central BusinessDistrict

SecondaryBusinessDistrict

NeighborhoodBusinessDistrict

String

Figure Figure 10-310-3

Figure 10-2

Planned Shopping CentersPlanned Shopping CentersAdvantagesAdvantages

• Well-rounded Well-rounded assortmentsassortments• Strong suburban Strong suburban populationpopulation• One-stop, family One-stop, family shoppingshopping• Cost sharingCost sharing• Transportation accessTransportation access• Pedestrian trafficPedestrian traffic

DisadvantagesDisadvantages* Limited flexibilityLimited flexibility

* Higher rentHigher rent* Restricted offeringsRestricted offerings

* CompetitionCompetition* Requirements for Requirements for

association membershipsassociation memberships* Too many mallsToo many malls

* Domination by anchor Domination by anchor storesstores

See Characteristics of Planned Centers, Table 10-1

Tehran, IranMilan, Italy

Cape Town, South Africa

Step 4: Analyze alternate sites contained in the specific retail location type -Chapter 10

Figure 10-Figure 10-7: 7:

Location/SiLocation/Site te

Evaluation Evaluation ChecklistChecklist

Pedestrian Pedestrian TrafficTrafficThe most crucial measures The most crucial measures

of a location’s and site’s of a location’s and site’s value are the number and value are the number and type of people passing by- type of people passing by- Proper pedestrian traffic Proper pedestrian traffic count should include age count should include age and gender (exclude very and gender (exclude very young children) count by young children) count by time of day pedestrian time of day pedestrian interviews spot analysis of interviews spot analysis of shopping tripsshopping tripsVehicular Vehicular

TrafficTrafficImportant for Important for

convenience storesconvenience stores

outlets in regional shopping outlets in regional shopping centerscenters

car washescar washes

suburban areas with limited suburban areas with limited pedestrian trafficpedestrian traffic

Parking Parking ConsiderationsConsiderations

Number and quality of spotsNumber and quality of spots

Distance of spots from storesDistance of spots from stores

Availability of employee parkingAvailability of employee parking

Price to charge customers for Price to charge customers for parkingparking

Accessibility of parking lotAccessibility of parking lotHow Many Parking How Many Parking Spaces?Spaces?

Shopping centers = 4-5 spaces per Shopping centers = 4-5 spaces per 1000 square feet of gross floor 1000 square feet of gross floor spacespace

Supermarkets = 10-15 spaces per Supermarkets = 10-15 spaces per 1000 square feet of gross floor 1000 square feet of gross floor spacespace

Furniture stores = 3-4 spaces per Furniture stores = 3-4 spaces per 1000 square feet of gross floor 1000 square feet of gross floor spacespace

TransportationTransportation- Delivery AccessDelivery Access

- Mass Transit Availability- Mass Transit Availability

Store/Area Store/Area CompositionCompositionSpecific Site Specific Site

Factors Factors -Age and condition of buildingAge and condition of building-Expansion PossibilitiesExpansion Possibilities

-VisibilityVisibility

Terms of Occupancy Terms of Occupancy ConsiderationsConsiderations

Ownership versus LeasingOwnership versus Leasing Zoning Zoning RestrictionsRestrictionsType of LeaseType of Lease Voluntary Voluntary RestrictionsRestrictionsOperations & Maintenance CostsOperations & Maintenance Costs TaxesTaxes

Types of LeasesTypes of Leases

Straight

Percentage

Graduated

Maintenance-Increase

Recoupment

NetChapter 10 Discussion Questions: 6, 8, 9, 10, 12