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Site selection

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Site selection for retail store

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Site selection

  1. 1. Site Selection
  2. 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. 3. Three Types of Locations Isolated Store Planned Shopping Center Unplanned Business District 3
  4. 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. 5. Examples of Isolated Stores  Large-store formats  Wal-Mart  Costco  Convenience stores  7-Eleven
  6. 6. Site Selection and Starbucks 6
  7. 7. Unplanned Business Districts Central Business District Secondary Business District Neighborhood Business District String 7
  8. 8. A Revitalized Central Business District
  9. 9. Unplanned Business Districts and Isolated Locations
  10. 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. 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. 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. 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. 14. Festival Walk, Hong Kong
  15. 15. Location and Site Evaluation One-Hundred Percent Location The optimum site for a particular store
  16. 16. Location/Site Evaluation Checklist
  17. 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. 18. Vehicular Traffic  Important for  convenience stores  outlets in regional shopping centers  car washes  suburban areas with limited pedestrian traffic
  19. 19. Parking Considerations  Number and quality of spots  Distance of spots from stores  Availability of employee parking  Price to charge customers for parking
  20. 20. Corner Influence and Hershey’s
  21. 21. Terms of Occupancy Considerations  Ownership versus leasing  Type of lease  Operations and maintenance costs  Taxes  Zoning restrictions  Voluntary regulations
  22. 22. Types of Leases Percentage Straight Maintenance- Increase Recoupment Graduated Net

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