Chapter 10

Site Selection

RETAIL
MANAGEMENT:
A STRATEGIC
APPROACH,
 Objectives
 To thoroughly examine the types of
locations available to a retailer: isolated
store, unplanned business district, and
planned shopping center
 To note the decisions necessary in
choosing a general retail location

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 Objectives
 To discuss several criteria for
evaluating general retail locations and
the specific sites within them
 To contrast alternative terms of
occupancy

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 Site Selection Considerations
1. Access: 4. Parking:
Convenient to freeway exit and Adequate off-street parking
entrance ramps 5. Expansion:
Served by public transportation Room for expansion
2. Visibility: 6. Environment:
Set back from street Immediate surroundings
Surrounding clutter should complement the
Sign placement service
3. Traffic: 7. Competition:
Traffic volume on street that may Location of competitors
Indicate potential impulse buying 8. Government:
Traffic congestion that could be a Zoning restrictions
hindrance (e.g.., fire stations) Taxes

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 Overview
 Step 1: investigate alternative trading
areas
 Step 2: determine what type of location
is desirable
 Step 3: select the general location
 Step 4: evaluate alternative specific
store sites

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 3 Types of Locations

Planned
Isolated
Shopping
Store
Center

Unplanned
Business
District

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 Isolated Stores
Advantages Disadvantages
* No competition * Difficulty attracting
* Low rental costs customers
* Flexibility * Travel distance
* Good for * Lack of variety for
convenience customers
stores * High advertising
* Better visibility expenses
* Adaptable * No cost sharing
facilities * Restrictive zoning
* Easy parking laws

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 Isolated Stores
Advantages Disadvantages
* No competition * Difficulty attracting
* Low rental costs customers
* Flexibility * Travel distance
* Good for * Lack of variety for
convenience customers
stores * High advertising
* Better visibility expenses
* Adaptable * No cost sharing
facilities * Restrictive zoning
* Easy parking laws

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 Unplanned Business Districts

Secondary
Central Business Business
District District

Neighborhood String
Business District
District

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 Revitalized Central Business
District

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 Planned Shopping Centers
Advantages Disadvantages
* Well-rounded * Limited flexibility
assortments * Higher rent
* Strong suburban * Restrictions on offerings
population * Competitive environment
* One-stop, family * Requirements for
shopping association
memberships
* Cost sharing
* Too many malls
* Transportation access
* Domination by anchor
* Pedestrian traffic stores
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 Location and Site Evaluation

One-hundred The
optimum site
Percent
for a
Location particular store

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 Location/
Site
Evaluation
Checklist

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 Pedestrian Traffic
 The most crucial measures of a location’s
and 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

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 Vehicular Traffic
• Important for
– convenience stores
– outlets in regional shopping centers
– car washes
– suburban areas with limited pedestrian
traffic

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 Parking Considerations
 Number and quality of spots
 Distance of spots from stores
 Availability of employee parking
 Price to charge customers for parking

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 Terms of Occupancy
Considerations
• Ownership versus Leasing
• Type of Lease
• Operations and Maintenance Costs
• Taxes
• Zoning Restrictions
• Voluntary regulations

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 Types of Leases

Straight Lease
Maintenance-
Percentage increase
Lease recoupment
lease

Graduated
Net Lease
Lease

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