Retail location

Importance of location decision

Most important ingredient Most difficult to plan, complex decision (affects

amount of customer traffic, affects volume of business) Cost can be high (large capital investment, transportation cost, human resources cost)
Once chosen it cant be changed Attributes of location have a strong impact retailers

overall strategy

Location decisions and its determining factors

Selection of a city
Selection of an area or type of location within a city Identification of a specific site

Selection of a city
Size of the citys trading area Population and its growth trends in trading area

Total purchasing power and its distribution

Total retail trade potential for different lines of trade Number, size and quality of competition

Developmental cost of location as per the city culture

Selection of an area or type of location within a city

Customer attraction power of a shopping district or a

particular store Qualitative and quantitative nature of competitive stores Availability of access routes Nature of regulations Direction of spread of city

Identification of a specific site

Adequacy and potential of traffic passing the site
Ability of the site to intercept the traffic flowing past

the site Complimentary nature of adjacent stores Adequacy of parking Vulnerability of the site to unfriendly competition

Types
Freestanding/Isolated store
Unplanned business district/ centres Planned centres

store
Store located along a major traffic artery No competitive retailers in the vicinity Store is dependant on its own pulling power and promotion to attract customers Advantages like no competition, better visibility

from road, easy parking, lower property costs or lower rent Disadvantages like no shared cost like in a shopping centre and lack of variety for shoppers Can be classified as neighbourhood stores or highway stores

Neighbourhood stores
Located in residential neighbourhood
Serve a small locality Sell convenience products like groceries Now, even large organized sector stores are coming up

in suburbs or main market

Highway stores
Located along highways or intersection of highways
Attract customers passing Dhabas, motels etc Provide good parking facilities, fast food restaurants,

drop in shopping Branded sector ex: Reliance A1 Plaza

Types of location
1
FREE STANDING LOCATIONS Neighbourhood stores Highway stores

UNPLANNED BUSINESS DISTRICTS/CENTRES

2
BUSINESS ASSOCIATED LOCATION

Central business districts Secondary business districts Neighbourhood business district

Suburban business district

PLANNED SHOPPING CENTRES

Regional shopping centres Neighbourhood/community Specialist market Periodic markets/weekly

Types of trade area

Secondary trading area

Tertiary trading area

Primary trading area Retail store

Steps involved in choosing a retail location

1. 2. 3. 4. 5.

Market identification Determining the market potential

Demographic features of the population Characteristics of household in that area Competition and compatibility Laws and regulations Trade area analysis

Cont
Identify the most attractive site
1. Traffic 2. Accessibility of the market 3. Total no. of stores and types of stores that exist in that area 4. Amenities available 5. To buy or to lease 6. The product mix offered

Select the best site available