Site selection for retail store

1. Site Selection

2. Overview
 Step 1: investigate alternative trading
areas (As discussed in Chapter 9)
 Step 2: determine what type of location
is desirable
 Step 3: select the general location
 Step 4: evaluate alternative specific
store sites
2

3. Three Types of Locations
Isolated
Store
Planned
Shopping
Center
Unplanned
Business
District
3

4. Isolated Stores
Advantages
* No competition
* Low rental costs
* Flexibility
* Good for
convenience stores
* Better visibility
* Adaptable facilities
* Easy parking
Disadvantages
* Difficulty in attracting
customers
* Travel distance
* Lack of variety for
customers
* High advertising
expenses
* No cost sharing
* Restrictive zoning laws
4

5. Examples of Isolated Stores
 Large-store
formats
 Wal-Mart
 Costco
 Convenience
stores
 7-Eleven

6. Site Selection and Starbucks
6

7. Unplanned Business Districts
Central Business
District
Secondary
Business
District
Neighborhood
Business
District
String
7

8. A Revitalized Central Business District

9. Unplanned Business Districts and Isolated
Locations

10. Planned Shopping Centers
Advantages
* Well-rounded
assortments
* Strong suburban
population
* One-stop, family
shopping
* Cost sharing
* Transportation
access
* Pedestrian traffic
Disadvantages
* Limited flexibility
* Higher rent
* Restricted
offerings
* Competition
* Requirements for
association
memberships
* Too many malls
* Domination by
anchor stores

11. Characteristics of Centers
Features Regional Center
Total site area 30-100+
Total sq. ft. leased 400,001-2,000,000+
Principal tenant 1+ department stores
Number of stores 50-150 or more
Minimum # of people in
trading area
100,000+
Driving time of trading area Up to 30 minutes
Location Outside central city on
highway

12. Characteristics of Centers
Features Community Center
Total site area 10-40+
Total sq. ft. leased 100,001-400,000
Principal tenant Supermarket or drug store
Number of stores 5-15
Minimum # of people
in trading area
3,000-50,000
Driving time of trading
area
Fewer than 15 minutes
Location In a single residential
area

13. Characteristics of Centers
Features Neighborhood Center
Total site area 3-15+
Total sq. ft. leased 300,000-100,000
Principal tenant Branch department store
Number of stores 15-25 or more
Minimum # of people
in trading area
20,000-100,000
Driving time of trading
area
Up to 20 minutes
Location Close to a populated
residential area

14. Festival Walk, Hong Kong

15. Location and Site Evaluation
One-Hundred
Percent
Location
The
optimum site
for a
particular store

16. Location/Site
Evaluation
Checklist

17. 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

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

19. Parking Considerations
 Number and quality of spots
 Distance of spots from stores
 Availability of employee parking
 Price to charge customers for
parking

20. Corner Influence and Hershey’s

21. Terms of Occupancy Considerations
 Ownership versus leasing
 Type of lease
 Operations and maintenance costs
 Taxes
 Zoning restrictions
 Voluntary regulations

22. Types of Leases
Percentage
Straight
Maintenance-
Increase
Recoupment
Graduated Net