Site Selection

Overview
 Step 1: investigate alternative trading
areas (Chapter 9)
 Step 2: determine what type of location
is desirable
 Step 3: select the general location
 Step 4: evaluate alternative specific
store sites

10-2
 3 Types of Locations

Planned
Isolated
Shopping
Store
Center

Unplanned
Business
District

10-3
 Isolated Stores
Isolated store is a No adjacent retailers with
freestanding retail which these type of
outlet located either stores shares traffic
a highway or a
street

10-4
 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

10-5
 Isolated Stores
• Large-store formats
– Wal-Mart
– Costco
• Convenience stores
– 7-Eleven

10-6
 Site Selection and McDonald’s

10-7
 Unplanned Business Districts

Secondary
Central Business Business
District District

Neighborhood
String
Business
District
District

10-8
 Central Business District
• Hub of retailing in a city
• Exists where there is great density of office
buildings or stores
• Vehicular & pedestrian traffic are high
• Core of CBD is often with cultural &
entertainment facilities surrounding it
• Has atleast one major department store &
no. of specialty & convenience stores

10-9
 Revitalized Central Business
District:Harborplace(Baltimore)

10-10
 Secondary Business District
• An unplanned shopping area in a city or town that is
bounded by the intersection of two major cities
• Larger cities have multiple SBDs each with at least
one junior department store or specialty stores
besides many smaller stores
• Placed nearer to residential area than CBD
• Has less width & depth of assortment, smaller
trading area & sells high proportion of convenience
oriented items

10-11
 Neighborhood Business District

• Appeals to the convenience shopping &

service needs of single residential area
• Offers good location. Parking, long store
hours
• Limited selection of goods & price tends to
be higher because of less competition

10-12
 String
• Comprise a group of retail store, often with
similar or compatible product lines
• Located along a street or highway
• Car dealers,antique stores & apparel
retailers

10-13
 Unplanned Business Districts and Isolated
Locations

10-14
 Planned Shopping Center
• Consists of group of architecturally unified
commercial establishments on a site that is
centrally owned or managed &
accompanied by parking facilities
• Stores in PSC compliment each other as to
the quality & variety of their product
offerings

10-15
 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
10-16
 Planned Shopping Centers
Types
 Regional shopping center
 Community shopping center
 Neighborhood shopping center

10-17
 Roosevelt Field

10-18
 Characteristics of Centers

Features Regional Center

Total site area 30-100+
Total sq. ft. leased 400,001-2,000,000+
Principal tenant 1, 2 or more department
stores
Number of stores 50-100
Minimum # of people in 100,000+
trading area
Driving time of trading Up to 30 minutes
area
Location Outside central city on
highway

10-19
 Festival Walk:
Hong Kong Megamall

10-20
 Characteristics of Centers
Features Community Center
Total site area 10-30
Total sq. ft. leased 100,000-400,000
Principal tenant Branch department store
Number of stores 15-25
Minimum # of people in 20,000-100,000
trading area
Driving time of trading Up to 20 minutes
area
Location Close to residential
areas

10-21
 CocoWalk:
A Life-Style Center

10-22
 Characteristics of Centers
Features Neighborhood
Center
Total site area 3-10
Total sq. ft. leased 30,000-100,000
Principal tenant Supermarket or
drugstore
Number of stores 5-15
Minimum # of people in 3,000-50,000
trading area
Driving time of trading Less than 15 minutes
area
Location Along major
thoroughfare in single
residential areas

10-23
 Location and Site Evaluation

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

10-24
Location/
Site
Evaluation
Checklist

10-25
 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

10-26
 Vehicular Traffic
• Important for
– convenience stores
– outlets in regional shopping centers
– car washes
– suburban areas with limited pedestrian traffic
Vehicular traffic count:
- count homeward-bound traffic
- Exclude vehicles on the other side of divided highway
- Omit out – state cars
Retailer should study the extent & timing of congestion

10-27
 Parking Considerations
 Number and quality of spots
 Distance of spots from stores
 Availability of employee parking
Need for retailers parking facilities depend on

Store’s trading area

Type of store
Proportion of shopper’s *Double – deck parking
using car or parking tiers
Existence of other parking
Flow of shopper’s
Parking by non-shopper’s

10-28
 How Many Parking Spaces?
• Shopping centers = 4-5 spaces per 1000
square feet of gross floor space
• Supermarkets = 10-15 spaces per 1000
square feet of gross floor space
• Furniture stores = 3-4 spaces per 1000
square feet of gross floor space

10-29
 Transportation
• Examine- mass transit, access from major
highways & ease of deliveries
• Availability of buses,trains,auto’s,taxi’s &
other public transit is must for areas not
readily accessible by vehicular traffic
• Transportation n/w studied for delivery truck
access

10-30
 Store composition
• No. &size of stores should be consistent
with type of location
• Retailer’s expectation in different locations
differ(isolated,neighborhood,regional center)
• Stores at a given location complement,
blend, cooperate with one another – each
benefits from the others presence – affinity
• Degree to which sores exchange customers
– measure of compatibility

10-31
 Store composition
Retail balance
proper balance occurs when
• No. of stores facilities for each merchandise
is equal to the location’s market potential
• Range of goods provided to foster one-stop
shopping
• Adequate assortment within any category
• Proper mix of store types(balance tenancy)

10-32
 Specific site
• Visibility
- site’s ability to be seen by pedestrian or
vehicular traffic
- high visibility makes passersby aware of the store
• Placement
- site’s relative position in the district or center
- corner influence
• Size & shape of building
• Due to saturation of many locations firms have
turned to non-traditional sites

10-33
 Terms of occupancy
• Ownership vs Leasing
• Types of Lease
- percentage lease
- straight lease
- graduated lease
- maintenance increase recoupment lease
- net lease
• Cost of operations & maintenance
• Taxes

10-34
 Corner Influence and Old Navy

10-35