CHAPTER 4

Retail Locations

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 Learning Objectives
Learning Objective 7-1 Describe the types of retail
locations available to retailers.
Learning Objective 7-2 Review the types of unplanned
locations.
Learning Objective 7-3 Analyze the characteristics of the
different types of shopping centers.
Learning Objective 7-4 Discuss nontraditional retail
locations.
Learning Objective 7-5 Match the locations to a retailer’s
strategy.
Learning Objective 7-6 Review the societal and legal
considerations in selecting locations.

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 Location an Important Retail Decision

•One of the most influential considerations by

consumer
•Can be used to develop sustainable competitive
advantage
•Location decisions are risky: buy or lease?

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 Types of Retail Locations 1 of 3
Learning Objective 7-1 Describe the types of retail locations available to
retailers.

1. Unplanned locations - Freestanding and urban retail locations that

lack any centralized management to determine which stores locate in
them or how they operate.

2. Planned locations - The shopping center and/or manager makes

and enforces policies that govern store operations.

3. Non-Traditional Locations - These types of locations are smaller

than traditional locations, which means they require less of a startup
commitment financially. They are locations that are inside other, larger
buildings.

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 Relative Features of Retail Locations

Relative Features:
1. Common area maintenance (CAM)- The common
facilities maintenance that shopping center management is
responsible for, such as the parking area, providing
security, parking lot lighting, outdoor signage for the center,
advertising, and special events to attract consumers.
2. Gross leasable area - Total floor area designed for the
retailer’s occupancy.
3. Trade area – Geographic area that has customers who
would patronize retailer.

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 Types of Retail Locations 3 of 3
Selecting a particular location type
• The size of the trade area (geographic area
encompassing most of the customers who would
patronize a specific retail site)
• The occupancy cost of the location
• The pedestrian and vehicle customer traffic
• The restrictions placed on store operations by the
property manager
• The convenience of the location for customers

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 1. Unplanned Retail Locations 1 of 3
Learning Objective 7-2 Review the types of unplanned locations.

Freestanding Sites: A retail location that is not connected to other

retailers.
Advantages
• Convenience
• High visibility
• Modest occupancy costs
• Fewer restrictions

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 1. Unplanned Retail Locations… .
Urban Locations
• Central business district (CBD)
• The traditional downtown business area of a city or town.
• Draws many people during business hours but slow in evening and
weekends.
• Inner city (Typically a high-density urban area consisting of apartment buildings
populated primarily by ethnic groups.)
• Urban decay - The process by which a previously well-functioning area falls
into disrepair.
• Food deserts - Area that lacks ready access to affordable fresh fruits,
vegetables, dairy, whole grains, and other healthful foods, as might be
provided by grocery stores or farmer’s markets.
• Gentrified residential areas
• Gentrification - A process in which old buildings are torn down or restored
to create new offices, housing developments, and retailers.

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 Redeveloping the Central Business District

Cleveland’s East Fourth Street development

attracts consumers to the CBD.

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 1. Unplanned Retail Locations… .

Main Street
• Traditional downtown shopping area in smaller
towns
• Secondary shopping areas in large cities and
suburbs
• Redevelopment efforts focus on better shopping
experience
• Don’t draw as many customers as CBD

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 Redeveloping Main Street

Boulder, Colorado, has a thriving Main Street retail scene.

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 2. Shopping Centers and Planned Retail Locations 1 of 9

Learning Objective 7-3 Analyze the characteristics of the different types of

shopping centers.

Shopping center - Group of retail and commercial

establishments that are planned, developed,
owned, and managed as a single property.
• Shopping center management firm - Company that
specializes in developing, owning, and maintaining
shopping centers.

Anchors - A large, well-known retail operation located in a shopping

center or Internet mall and serving as an attracting force for consumers
to the center.

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EXHIBIT 7-1 Characteristics of Different Retail Locations

Retail Location Typical Tenants

Neighborhood and community Supermarkets, discount stores
shopping centers
Power centers Category specialists
Enclosed shopping malls Department and specialty apparel stores
Lifestyle centers Specialty apparel and home stores, restaurants
Outlet centers Off-price retailers and factory outlets
Theme/festival centers Specialty stores and restaurants

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 2. Shopping Centers and Planned Retail Locations 2 of 9

Neighborhood, and Community Shopping Centers

• Also called strip shopping centers
• Attached rows of open-air stores with parking typically
in front of stores
• Convenient locations, easy parking, relatively low
occupancy costs
• Limited trade area

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 2. Shopping Centers and Planned Retail Locations 3 of 9

Power Centers
• Shopping center that is dominated by several large
anchors, including discount stores, off-price stores,
warehouse clubs, or category specialists.
• Located near enclosed shopping mall

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 2. Shopping Centers and Planned Retail Locations 4 of 9

Enclosed Shopping Malls

• Attract many customers
• Large trade area
• Generate significant pedestrian traffic
• W eather not a factor
• Mall management provides level of consistency
• High occupancy costs
• Intense competition
• Older malls unappealing to shoppers

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 2. Shopping Centers and Planned Retail Locations 5 of 9

Lifestyle Centers
• Resemble main streets in small towns
• Design ambience and amenities such as fountains
• Attractive to specialty retailers
• Bad weather can impede traffic
• Convenient parking
• Occupancy costs lower than enclosed malls
• Less retail space

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 Lifestyle Centers

Resembling main streets in

small towns, lifestyle
centers like the Easton
Town Center in Columbus,
Ohio, are shopping centers
that have an open-air
configuration of specialty
stores, entertainment, and
restaurants, with design
ambience and amenities
such as fountains and
street furniture.

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 2. Shopping Centers and Planned Retail Locations 6 of 9

Mixed-Use Development
• Combine several different uses into one complex
including retail, office, residential, hotel, recreation, or
other functions.
• Live-work-play environment

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 2. Shopping Centers and Planned Retail Locations 7 of 9

Outlet Centers
• Typically stores owned by retail chains or
manufacturers that sell excess and out-of-season
merchandise at reduced prices.
• Some include entertainment component

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 2. Shopping Centers and Planned Retail Locations 8 of 9

Theme/Festival Centers
• a unifying theme that is carried out by the individual
shops in their architectural design and, to an extent,
their merchandise.
• Often viewed as tourists traps and avoided by locals.
Example - Boston’s historic Faneuil Hall reconceived
as “festival marketplace”in late 1970s

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 Theme/Festival Centers

The Grand Canal Shops at the Venetian Hotel in Las

Vegas is a theme/festival center with a unifying theme.

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 2. Shopping Centers and Planned Retail Locations 9 of 9

Larger, Multi-format Developments

• Omnicenters A combination of mall, lifestyle, and
power center components in a unified, open-air
layout.
• Reflect growing tendency of consumers to cross-
shop (A pattern of buying both premium and low-
priced merchandise or patronizing expensive, status-
oriented retailers and price-oriented retailers.)

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 3. Non-traditional Locations 1 of 2
Learning Objective 7-4 Discuss nontraditional retail locations.

Pop-Up Stores and Other Temporary Locations

• Pop-up stores are temporary locations that focus on
new products or limited group of products
• Store-within-a-store locations involve retailer who
rents part of retail space operated by another
independent retailer
• Merchandise kiosks - Small, temporary selling
space typically located in the walkways of enclosed
malls, airports, train stations, or office building
lobbies.

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 3. Non-traditional Locations 2 of 2
Birchbox’s pop-up Macy’s has an Apple
store is in a temporary store-within-a store at
location and focuses its flagship location in
on a limited selection New York.
of products.

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 Location and Retail Strategy 1 of 2
Learning Objective 7-5 Match the locations to the retailer’s strategy.

Shopping Behavior of Consumers in Retailer’s

Target Market
• Convenience shopping
• Consumer concerned with minimal effort to get product
• Comparison shopping
• Consumer more involved in purchase decision
• Destination stores
• Specialty shopping
• Consumers know what they want and will not accept
substitute, willing to pay a premium

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 Location and Retail Strategy 2 of 2

Density of Target Market

• Good location has many people in target market who
are drawn to it
Uniqueness of Retail Offering
• location are important for retailers with unique,
differentiated offerings

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 Societal and Legal Considerations 1 of 4

Learning Objective 7-6 Review the societal and legal considerations in

selecting locations.

Urban Sprawl - Expansions of residential and

shopping center developments into suburban or
rural areas, beyond urban centers.
• Urban sprawl creates congestion, air pollution,
concentrated poverty, racial/economic segregation

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 Societal and Legal Considerations 2 of 4

Reasons for opposition to Big-BoxRetailers

• Big-boxstores drive local retailers out of business
• Don’t provide living wage and Hire part-time workers
to avoid health insurance costs

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 Societal and Legal Considerations 3 of 4

Zoning - The regulation of the construction and

use of buildings in certain areas of a
municipality.
• Five categories of activities
 Residential
 Commercial
 Mixed residential and commercial
 Industrial
 Special

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 EXHIBIT 7-2 Zoning Map of Superior
W isconsin

Jump to long description in

appendix Source: City of Superior, Wisconsin.
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 Societal and Legal Considerations 4 of 4

Building Codes: Legal restrictions

describing the size and type of building,
signs, type of parking lot, and so on that
can be used at a particular location.
Example: Building codes in Santa Fe,
New Mexico, require that buildings keep a
traditional mud stucco (adobe)style

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