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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