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Retail Store Location: Presented by Sindu Thankappan Roll No:15

Retail store location is a critical decision that impacts success. Key factors to consider include demographics of the surrounding area, competition, demand for goods and services, infrastructure, accessibility, and legal/environmental issues of sites. A thorough location analysis is needed to evaluate these characteristics of potential sites before selecting one with the best opportunities.

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59 views22 pages

Retail Store Location: Presented by Sindu Thankappan Roll No:15

Retail store location is a critical decision that impacts success. Key factors to consider include demographics of the surrounding area, competition, demand for goods and services, infrastructure, accessibility, and legal/environmental issues of sites. A thorough location analysis is needed to evaluate these characteristics of potential sites before selecting one with the best opportunities.

Uploaded by

sinduMBA
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Retail Store Location

Presented by
Sindu Thankappan
Roll no:15
importance of store location

The primary goal of retail store is to attract the shopper to


the location
A regional analysis is needed before selecting location

While a good retail location does not ensure success, a


bad retail location does ensure problems
• Retail site selection is a very important decision.
• First, a location is usually one of the most important
elements customers use in choosing a store.
• Second, when chosen, a retailer must live with the
site for many years because it is expensive.
• Lastly, because great sites are acquired by other
retailers, it is mostly hard to find them.
importance of store location

 Retail stores should be located where market opportunities are


best
 After a country or a region have been identified as
satisfactory, a specific site must be chosen that will serve the
desired target market
 Customer shopping behavior should be made before a location
is chosen
 Two things are to considered in selecting location
1.country and region
2.Trade area and site evaluation
• At retail business, achievement or failure is related with the
features of trade area surrounding the location. Sales in retail
stores are not only related with the numbers of families and
people next to the trade area, but also the customers come
from abroad.
• Requires complex decision making
• Costs Little flexibility once a location has been chosen
• Attributes of location have a strong impact on the retailer’s
strategy
Characterstics used in location Analysis

 Demographics
 Economic
 Cultural
 Demand
 Competition
 Infrastructure
Competition
Competition
 In some areas retailers will face much stiffer
competition than in other areas
 One of the success is the retailers ability to handle
competitive advantages of competition
 Number and types of stores in area
 Analysis of “key” players in general area
 Competitiveness of other merchants
 Number and location of direct competitors in area
 Possibility of joint promotions with local merchants
Demand
Demand

• The demand for a retailer’s good and services will


influence where the retailers will locates its stores
• Demand characteristics are a function of population
and the buying power of population that the retailers
is targeting
Culture
Culture

• Cultural characteristics impact how consumers shop


and what goods they purchased .so retailers must
understand the culture and language of their
customers
Other factors
 Size & characteristics of population
 Level of competition
 Access to transportation
 Availability of parking
 Attributes of nearby stores
 Property costs
 Length of agreement (if lease)
 Population trends
 Legal restrictions
Retail Store Location
• Accessibility
• Locational advantages
• Terms of occupancy
• Legal considerations (e.g. environmental considerations,
zoning restrictions, building codes, signs, licensing
requirements)
Demographics

 Population and/or household base


 Population growth potential
 Lifestyles of consumers
 Income potential
 Age makeup
 Population of nearby special markets,
that is, daytime workers, students,
and tourists, if applicable
 Occupation mix
Infrastructures
 It is basic frame work that allows business to operate

 Retailers requires some form of channels to deliver


the goods and services to their door

 Depending on transportation is involved, distribution


relies heavily on the existing infrastructure such of
highways ,roads, bridges ,river ways and railways
Traffic Flow and Accessibility

• Number and type of vehicles passing location


• Access of vehicles to location
• Number and type of pedestrians passing
location
• Availability of mass transit, if applicable
• Accessibility of major highway artery
• Quality of access streets
• Level of street congestion
• Presence of physical barriers that affect
trade area shape
Checklist for location Evaluations
Site Characteristic
• Number of parking spaces available
• Distance of parking areas
• Ease of access for delivery
• Visibility of site from street
• History of the site
• Compatibility of neighboring stores
• Size and shape of lot
• Condition of existing building
• Ease of entrance and exit for traffic
• Ease of access for handicapped customers
• Restrictions on sign usage
• Building safety code restrictions
• Type of zoning
Cost Factors

• Terms of lease/rent agreement


• Basic rent payments
• Length of lease
• Local taxes
• Operations and maintenance cost
• Restrictive clauses in lease
• Membership in local merchants
association required
• Voluntary regulations by local merchants
Site Selection
• Trade area -- contiguous geographic area that accounts for the
majority of a store’s sales and customers
• Primary trade zone -- Usually 3-5 mile radius; generates 60-
65% of customers
• Secondary trade zone -- Usually 3-7 mile radius; generates
20% of customers
• Tertiary trade zone -- Usually 15 - 50 mile radius
Steps in selecting a site:
• Evaluate alternative geographic areas in terms of the
characteristics of residents and existing retailers
• Determine whether to locate as stand-alone,
unplanned business district or planned shopping
center
• Make a decision about location type
• Analyze alternate sites
Environmental Issues
“Above-ground” risks - such as asbestos-containing
materials or lead pipes used in construction.

Hazardous materials - e.g. dry cleaning chemicals,


motor oil, that have been stored in the ground.

Retailers’ Protection
• Stipulate in the lease that the lessor is responsible
for removal and disposal of this material if it’s found.
• Retailer can buy insurance that specifically protects
it from these risks.
Other Legal Issues
Zoning and Building Codes
• Zoning determines how a particular site can be
used.
• Building codes determine the type of building, signs,
size, type of parking lot, etc. that can be used
Signs
• Restrictions on the use of signs can also impact a
particular site’s desirability
Licensing Requirements
• Some areas may restrict or require a license for
alcoholic beverages
• Legal infrastructure such as laws, regulations
and court rulings
• Technical infrastructure such as Level of
computerization, communication system and
electrical power availability also influence
location decision

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