2. OUTCOMES
On completion of this session you should be able to:
• Determine the importance of location in retailing.
• Examine the principles on which retail location decisions should be made.
• Describe the major location alternatives that are available to the retailers.
• Provide an overview of most of the factors that influence the location of a retail
outlet.
• Stress the importance of market area demarcation and evaluation, as well as
methods suitable for doing so.
• Explain a procedure for the selection and evaluation of retail sites.
• Identify the major aspects to be assessed when location in a shopping centre is
considered.
3. WHY IS LOCATION IMPORTANT IN RETAIL
• Attract customers
• Succeed regardless of the mediocre strategy
• Ability to generate huge amounts of pedestrians traffic
• A site consistent with your mission, goals and target market
• Supply and distribution is much easier
• Provides a strong competitive advantage
• Bad location is a liability
4. FACTORS ON WHICH RETAIL DECISIONS
SHOULD BE MADE
• Accessibility
• Security
• Competition
• Skill base in the area
• Business rates
• Potential for growth
5. MAJOR LOCATION ALTERNATIVES
• E-Commerce: Electronically buying and selling goods over the internet.
• Kiosks: A small open-fronted booth placed in high traffic areas.
• Food trucks: Large vehicles equipped for cooking and selling food.
• Mobile retail units: Shopping and purchasing goods using your smartphone or
tablet.
6. FACTORS THAT INFLUENCE LOCATION OF
A RETAIL OUTLET
• Size of Catchment Area − Geographic area on which a firm attracts its clients, size and
shape.
• Occupancy Costs − Costs of lease/owning are different in different areas, property taxes,
location maintenance costs.
• Customer Traffic − Number of customers visiting the location, number of private vehicles
passing through the location, number of pedestrians visiting the location.
• Restrictions Placed on Store Operations − Restrictions on working hours, noise intensity
during media promotion events.
• Location Convenience − Proximity to residential areas, proximity to public transport
facility.
7. Impacts sales
Being closed to
customer
Type of area affects
customer perception
Transport to area
Size and range of
market
8. Size and shape of market
Range – maximum distance customer is
willing to travel
Threshold – minimum amount of good needed
Economic Condition
Utility, inflation, income level, taxation
Competitive Market areas
9. 4.6
Selection and Evaluation of Retail sites Procedure
1 Home country vs. Abroad
Political factors, Trade Barriers, Economies of Scale, Regulations,
International Competition, Incentive
2 Select Region
Availability of merchandise, Proximity to the market, Infrastructural
facilities, Transport facility, Climatic conditions
3 Select Community
Urban area, Rural area, Suburban area
4 Selection of Exact store
• Availability of funds, Cost of land development, Transport facilities, water
and fire protection facilities, means of communication, Waste disposal
provision
10. 4.7
Aspects to be Assessed when location in a
shopping centre is considered
11. To provide a competitive environment in which to shop and to provide convenient access
for both sales and service
Analyze Quantity and location (Performance)
Determine how many outlets business needs
