Retail Location I 7.1

Key Issues

Process of selecting a site Retail growth strategies Types of retail locations Types of shopping centers Trade area & trade area analysis Methods to analyze trade areas

Retail Location I 7.2

You own a single successful fresh juiceoutlet, especially popular during

lunch & right after work.You want to add a 2nd location.

What will you look foras you shop for a site?Where would you find

the information you need?

Retail Location I 7.3

If It’s In a Mall …

You own a single successful fresh juiceoutlet, especially popular during

lunch & right after work.You want to add a 2nd location.

If you were to locate your siteinside a mall, where would you

want to be?

Retail Location I 7.4

Location Analysis

AreaAnalysis

Site Analysis

RegionalAnalysis

Retail Location I 7.5

Selecting a Retail Site

The Expansion StageUse real estate firms, local personnel, etc.to identify a large number of possible sites

The Qualitative StageUse checklists or examine performance of analogous

stores to screen possible sites for the best sites

The Quantitative StageUse quantitative modeling to further screen the likelysites by generating forecasted potentials for each site

The Decision StageMake a site selection decision based on the results of

both the quantitative qualitative assessments

Retail Location I 7.6

Retail Development Strategies

Old Product New Product

OldMarket

NewMarket

MarketPenetration

MarketDevelopment

ProductDiversification

ProductDevelopment

Retail Location I 7.7

Retail Growth Strategies

Time

Sal

es

Retail Location I 7.8

Types of Retail Locations

CBDs & MXDsSecondary shopping areasNeighborhood shopping districtsHighway outletsFreestanding unitsShopping centers

NeighborhoodCommunityPower centerRegional & super-regionalStrip mall

Retail Location I 7.9

Shopping Centers

A shopping center is a group of retail and other commercial establishments that is planned, developed, owned, and managed as a single property.

Two main configurations: Strip centers have parking in front of the stores

and do not have enclosed walkways linking the stores.

Malls have a pedestrian focus; customers park in outlying areas and walk to the stores. Traditional malls are enclosed with walkways between two facing strips of stores.

Retail Location I 7.10

Types of Shopping Centers

Features Neighborhood Community Power Center

Concept Convenience

SquareFeet

30,000 –150,000

Number ofAnchors One or more

Types ofAnchors Supermarket

Source: Levy & Weitz

Trade Area ~ 3 miles

General mdse,convenience

Two or more

Discount store,supermarket, home

improvement, warehouse store, etc.

3 – 7 miles

Category-dominantanchors

Usually not enclosed

Three or more

Discount store,supermarket, home

improvement, warehouse store, etc.

Less than 15 minutes

Retail Location I 7.11

Types of Shopping Centers

Features Regional Mall Super Regional

Concept General mdse, fashionUsually enclosed

SquareFeet

400,000 –800,000

Number ofAnchors Three or more

Types ofAnchors

Full-line dept store, discount dept store

Source: Levy & Weitz

Trade Area 5 – 15 miles

Similar to regional but with greater variety &

assortment

Three or more

Full-line dept store, discount dept store

5 – 25 miles

Mfr’s outlet stores

na

Mfr’s outlet stores, restaurants,

entertainment

na

Outlet Mall

Retail Location I 7.12

Name Location Gross Leasable Space in Square Feet

Mall of America

Del Amo Fashion Center

South Coast

Plaza/Crystal Court Woodfield Mall

SawGrass Mills

Bloomington, MN

Torrance, CA

Costa Mesa, CA

Schaumberg, IL

Sunrise, FL

4,200,000

3,000,000

2,900,000

2,700,000

2,300,000

The Largest U.S. Shopping Malls

Retail Location I 7.13

Retail Trade Areas

60 – 65%of Customers

store

Retail Location I 7.14

Trade Area forProvo Towne Centre?

Source of Map:www.yahoo.com

Retail Location I 7.15

Trade Area Influences

Accessibility roads natural obstacles other barriers (e.g., crime areas)

Magnetism of store or shopping

center Competition

level of competition

proximity to competitors

Retail Location I 7.16

Analyzing Retail Trade Areas:A Site-Selection Framework

Competitordata

No. & Size of Competitors, Sq Ft of Retail Space, Front Ft of Retail Space, Saturation of Area (people/retailer, avg store sales, sales/capita,

sales/ft, sales/employee)

Delivery & Billing

Analysis

Check-lists

CustomerSpotting

Zip Code Analysis

Trend Analysis

Survey Research

2ndaryResearch

Sourceof data

GISSoftware

Frequency of Shopping, Average Size of Purchase ($), Concentration of Customers by Geographic Area, Age Distribution, Avg Educational

Level, % Home Ownership, Disposable & Per Capita Income, Occupational Distribution, Trends

Residentdata

Retail Location I 7.17

New Site for Hogi Yogi

What would be important in selecting a site?

Delivery & Billing

Analysis

Check-lists

CustomerSpotting

Zip Code Analysis

Trend Analysis

Survey Research

2ndaryResearch

Sourceof data

GISSoftware

Retail Location I 7.18

Typical Checklist for Site Evaluation

Local DemographicsLocal Demographics•

Traffic Flow and AccessibilityTraffic Flow and Accessibility• Number of vehicles• Type of vehicles• Number of pedestrians• Type of pedestrians• Availability of mass transit• Access to major highway• Level of street congestion• Quality of access streets

Retail StructureRetail Structure• Number of competitors in area• Number and types of stores in area• Complementarity of neighboring stores• Proximity to commercial areas• Joint promotion by local merchants

Site CharacteristicsSite Characteristics• Number of parking spots available• Distance of parking areas• Visibility of site from street• Size and shape of the lot• Condition of existing building (if any)• Ingress and egress quality

Legal and Cost FactorsLegal and Cost Factors• Type of zoning• Length of lease• Local taxes• Operations and maintenance costs• Restrictive clauses in lease• Voluntary regulations by local merchants

Retail Location I 7.19

Done among analog stores …What would this yield?

Why would you do this?How would you collect this information?

Parade MagazineWinners

Delivery & Billing

Analysis

Check-lists

CustomerSpotting

Zip Code Analysis

Trend Analysis

Survey Research

2ndaryResearch

Sourceof data

GISSoftware

Retail Location I 7.20

What kinds of questions might you ask?

Delivery & Billing

Analysis

Check-lists

CustomerSpotting

Zip Code Analysis

Trend Analysis

Survey Research

2ndaryResearch

Sourceof data

GISSoftware

Retail Location I 7.21

Source: Claritas Corporation

Delivery & Billing

Analysis

Check-lists

CustomerSpotting

Zip Code Analysis

Trend Analysis

Survey Research

2ndaryResearch

Sourceof data

GISSoftware

Retail Location I 7.22

Link: http://www.esri.com/industries/business/business/site_selection.html

Delivery & Billing

Analysis

Check-lists

CustomerSpotting

Zip Code Analysis

Trend Analysis

Survey Research

2ndaryResearch

Sourceof data

GISSoftware

Retail Location I 7.23

Land AreaPopulation

Age distributionGender

Household size, typeMarital status

Owner-occupied housing

Rental statusPersons in unit

Race and ethnicityCountry of origin

Place of birthLanguage spoken at home

School Enrollment

Educational EnrollmentFertility

Departure time for workOccupation

Class of workerDisability

Income typePoverty status

Census Data

Dept ofCensus

Dept ofCensus

Delivery & Billing

Analysis

Check-lists

CustomerSpotting

Zip Code Analysis

Trend Analysis

Survey Research

2ndaryResearch

Sourceof data

GISSoftware

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