Site Selection
RETAIL MANAGEMENT: A STRATEGIC APPROACH
11th Edition BERMAN EVANS
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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
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Chapter Objectives (cont.)
To discuss several criteria for evaluating
general retail locations and the specific sites within them
To contrast alternative terms of occupancy
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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.
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Three Types of Locations
Isolated Store Planned Shopping Center Unplanned Business District
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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
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Examples of Isolated Stores
Large-store formats
Wal-Mart Costco
Convenience stores
7-Eleven
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Figure 10-1: Site Selection and Starbucks
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Unplanned Business Districts
Secondary Business District
Central Business District Neighborhood Business District
String
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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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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
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Figure 10-4: Macys and Shopping Centers
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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
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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
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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
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Figure 10-5: Festival Walk, Hong Kong
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Location and Site Evaluation
One-Hundred Percent Location
The optimum site for a particular store
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Figure 10-7: Location/Site Evaluation Checklist
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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
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Vehicular Traffic
Important for convenience stores outlets in regional shopping centers car washes suburban areas with limited pedestrian traffic
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Parking Considerations
Number and quality of spots Distance of spots from stores
Availability of employee parking
Price to charge customers for parking
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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
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Figure 10-8: Corner Influence and Hersheys
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Terms of Occupancy Considerations
Ownership versus leasing Type of lease Operations and maintenance costs Taxes Zoning restrictions Voluntary regulations
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Types of Leases
Straight MaintenanceIncrease Recoupment
Percentage
Graduated
Net
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