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10-1 Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall Site Selection RETAIL  MANAGEMENT:  A STRATEGIC  APPROACH 11th Edition 11th Edition BERMAN EVANS 1

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8/6/2019 Berman 10 Plums

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10-1Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Site Selection

RETAIL MANAGEMENT:

 A STRATEGIC

 APPROACH 

11th Edition11th Edition

BERMAN EVANS

1

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10-2Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter Objectives

To thoroughly examine the types of 

locations available to a retailer: isolatedstores, unplanned business districts, and

planned shopping centers

To note the decisions necessary in choosing

a general retail location To describe the concept of one-hundred

percent location

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10-3Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter Objectives (cont.)

To discuss several criteria for evaluating

general retail locations and the specificsites within them

To contrast alternative terms of occupancy 

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10-4Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Overview Step 1: investigate alternative trading

areas (Chapter 9)

Step 2: determine what type of location isdesirable

Step 3: select the general location

Step 4: evaluate alternative specific storesites

Chapter 10 discusses steps 2Chapter 10 discusses steps 2--4.4.

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10-5Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Three Types of LocationsThree Types of Locations

Isolated

Store

Planned

ShoppingCenter

Unplanned

Business

District

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10-6Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Isolated StoresIsolated Stores

 A dvantages A dvantages

* No competition

*

Low rental costs* Flexibility 

* Good forconvenience stores

* Better visibility 

* A daptable facilities

* Easy parking

DisadvantagesDisadvantages

* Difficulty attractingcustomers

* Travel distance

* Lack of variety forcustomers

* High advertising

expenses* No cost sharing

* Restrictive zoninglaws

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10-7Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Examples of Isolated StoresExamples of Isolated Stores

y Large-store formats

y  Wal-Mart

y Costcoy Convenience stores

y 7-Eleven

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10-8Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Figure 10-1: Site Selection and Starbucks

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10-9Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Unplanned Business DistrictsUnplanned Business Districts

Central BusinessDistrict

Secondary

Business

District

Neighborhood

BusinessDistrict

String

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10-10Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Figure 10-2: A Revitalized Central Business

District

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10-11Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Figure 10-3: Unplanned Business Districts and

Isolated Locations

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A central business district (CBD) is the hub of retailing in a city, andis synonymous with the term downtown.

strength  weaknesses

y Product assortment

y

 Access to public transportationy  Variety of store types and

positioning strategies

y  Wide range of prices

y  Variety of customer services

y Pedestrian trafficy

y Inadequate parking, and traffic

and delivery congestiony Travel time for suburbanites

y Frail condition of some cities(e.g., aging stores) compared

 with their suburbs

y

Poor image to potentialconsumers

y High rents and taxes

y Relocation of stores to suburbs

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A secondary business district (SBD) is an unplanned shopping area

in a city or town that is usually bounded by the intersection of twomajor streets.

Strength  Weaknesses

y Product assortment

y  Access to publictransportation

y Less crowding

y More personal service

y Location near residentialareas

y Discontinuity of offerings

y High rent and taxesy Traffic and delivery 

congestion

y  Aging facilities

y Parking difficulties

y Fewer chain outlets

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A neighborhood business district (NBD) is an unplanned shopping

area that appeals to the convenience shopping and service needsof a single residential area.

 A dvantages Disadvantages

y Good location

y Long store hoursy Good parking

y Less hectic atmosphere

y Limited selection

y Higher prices

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A string is an unplanned shopping area comprising a group of 

retail stores, often with similar or compatible product lines,located along a street or highway.

 A dvantages Disadvantages

y Lower rent

y More flexibility y Better road visibility and

parking

y Lower operating costs

y More traffic

y Some sharing of commoncosts

y Less product variety 

y Increased travel timey Higher advertising costs

y Zoning restrictions

y The need to build premises

y

Competitiony Less control over prices and

less loyalty 

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10-16Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Planned Shopping CentersP

lanned Shopping Centers

 A dvantages A dvantages

*  Well-rounded

assortments* Strong suburban

population

* One-stop, family shopping

* Cost sharing

* Transportation access

* Pedestrian traffic

DisadvantagesDisadvantages* Limited flexibility 

*

Higher rent* Restricted offerings

* Competition

* Requirements forassociation

memberships* Too many malls

* Domination by anchorstores

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10-17Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Figure 10-4: Macys and Shopping Centers

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10-18Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Table 10-1a: Characteristics of Centers

Features Regional enter 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 intrading area

100,000+

Driving time of trading area Up to 30 minutes

Location Outside central city onhighway

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10-19Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Table 10-1b: Characteristics of Centers

Features Community Center 

Total site area 10-40+

Total sq. ft. leased 100,001-400,000Principal tenant Supermarket or drug store

Number of stores 5-15

Minimum # of people

in trading area

3,000-50,000

Driving time of tradingarea

Fewer than 15 minutes

Location In a single residentialarea

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10-20Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Table 10-1c: Characteristics of Centers

Features Neighborhood Center 

Total site area 3-15+

Total sq. ft. leased 300,000-100,000Principal tenant Branch department store

Number of stores 15-25 or more

Minimum # of people

in trading area

20,000-100,000

Driving time of tradingarea

Up to 20 minutes

Location Close to a populatedresidential area

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10-21Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Figure 10-5: Festival Walk, Hong Kong

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10-22Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Location and SiteEv

aluationLocation and SiteEv

aluation

One-Hundred Percent 

Location

Theoptimum site

for a

particular store

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10-23Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Figure 10-7:

Location/Site

EvaluationChecklist

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10-24Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Pedestrian TrafficPedestrian Traffic

The most crucial measures of a location/sites 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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10-25Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Vehicular TrafficVehicular Traffic

y Important for

convenience stores outlets in regional shopping centers

car washes

suburban areas with limited pedestrian

traffic

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10-26Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Parking ConsiderationsParking Considerations

Number and quality of spots

Distance of spots from stores

A  vailability of employee parking

Price to charge customers for parking

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10-27Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

How Many Parking Spaces?How Many Parking Spaces?

y Shopping centers = 4-5 spaces per 1000

square feet of gross floor spacey Supermarkets = 10-15 spaces per 1000

square feet of gross floor space

y Furniture stores = 3-4 spaces per 1000

square feet of gross floor space

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10-28Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Figure 10-8: Corner Influence and Hersheys

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10-29Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Terms of Occupancy ConsiderationsTerms of Occupancy Considerations

y Ownership versus leasing

yT ype of lease

y Operations and maintenance costs

y Taxes

y Zoning restrictions

y Voluntary regulations

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10-30Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

Types of LeasesTypes of Leases

Percentage

Straight

Maintenance-

Increase

Recoupment

Graduated Net

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10-31Retail Mgt. 11e (c) 2010 Pearson Education, Inc. publishing as Prentice Hall

All rights reserved. No part of this publication may be

reproduced, stored in a retrieval system, or transmitted, in

any form or by any means, electronic, mechanical,

 photocopying, recording, or otherwise, without the prior 

written permission of the publisher. Printed in the United

States of America.