The document discusses factors to consider for retail location strategy and decision making. It outlines three levels of location decisions - city selection, area within a city, and specific site. Key determinants at each level include population, purchasing power, competition, traffic, and zoning regulations. The document also differentiates between types of retail locations, goods, and importance of analyzing a store's trading area to understand customer profiles and estimate market potential. Site selection requires considering product type, costs, competitors, accessibility, parking and traffic flow.

1. GROUP MEMBERS
UMAIR JAVED
ALI NAEEM
PRESTON UNIVERSITY H8 ISLAMABAD

2. RETAIL LOCATION STRATEGY
BY UMAIR JAVED

3.  Location is the most important ingredient for
any business that relies on customers.
 Location decisions can be complex, costs can
be quite high.

4. Importance of Location
Decision
 The importance of the location decision is due
to the following factors:
 Location is a major cost factor because it:
 Involves large capital investment.
 Affects transportation costs.
 Affects human resources cost, e.g., salaries.
 Location is a major revenue factor because it:
 Affects the amount of customer traffic.
 Affects the volume of business.

5. Importance of Location
Decision
 Location is a broader concept, which denotes the
store and its trading area from where a majority of
its customers originate, while a site refers to the
specific building or part of the building where a
store is located.

6. Levels of Location Decision and its
Determining Factors
 A retailer has to take the location decision.
1. Selection of a city.
2. Selection of an area or type of location within a city.
3. Identification of a specific site.

7. Levels of Location Decision and its
Determining Factors
LEVEL OF LOCATION DECISION
SELECTION OF CITY AREA WITHIN CITY SITE DECISION
Size of the city’s
trading area.
Population and
growth trends.
Purchasing power
and its distribution.
Trade potential.
Number, size,
quality of
competition.
Customer attraction
of shopping district.
Quantitative and
qualitative nature of
competition.
Availability of
access route.
Nature of zoning
regulation.
Direction of the area
expansion.
Adequacy and
potential traffic.
Complementary
nature of adjacent
store.
Adequacy of
parking.

8. Types of Retail Location
TYPES OF
LOCATIONS
FREE-STANDING
LOCATIONS
Neighboring stores.
Highway stores.
UNPLANNED BUSINESS
DISTRICTS/CENTRES
Neighborhood-business-district.
Downtown or central-business-district (CDB).
Secondary-business-district.
Suburban business district.
Strip centre.
PLANNED SHOPPING
CENTRES
Regional shopping centres of
malls.
Neighborhood/community.
Specialist market.

10. Types of Consumer Goods and
Location Decision
 Convenience Goods
 Convenience goods usually imply products that
carry a low unit price, are purchased frequently.
 Products like candy bars, cigarettes, and milk are
generally categorized as convenience goods.
 Shopping Goods
 Products with a high unit price, which are
purchased infrequently.
 Price, quality, and features of such products are
compared across stores by customers.
 Examples of such products are men’s suits,
automobiles, and furniture.

11. Types of Consumer Goods and
Location Decision
 Specialty Goods
 Products with high unit price which are bought
infrequently.
 Examples of such products are precious jewellery,
expensive perfume, fine furs, and so on, of
specific brands or name labels.

12. Trading Area
 Geographic area from which a retailer draws
customers that account for the majority of a
store’s sales.
 Trade Area Analysis
 A thorough analysis of trade area is necessary to
estimate market potential, understand customer
profile, competition, develop merchandising plan, and
focus promotional activities.

13. Trading Area
 Market Potential
 In estimating the market demand potential, retailers
consider factors that are specific to their product line.
 Some of the important indicators of market demand
are as follows:
 Population Characteristics and its Trends
 Retailers can access data regarding population size,
population density, and number of households, income
distribution, sex, education, age, occupation, and
mobility.

14. Trading Area
 Purchasing Power and its Distribution
 The average household purchasing power and
distribution of household income can significantly
influence selection of a particular retail area.
 Business Climate
 High level of employment drives up the purchasing
power.
 It is in the internet of retailers and developers to
determine which geographical areas are growing
rapidly and why.
 Competition
 The level and nature of competition in an area also
influence the selection of a particular retail location.

15. Site Selection Analysis
 A retailer has to consider the following factors
while selecting a site:
 Kind of products sold.
 Cost factor.
 Competitor’s location.
 Ease of traffic flow and accessibility.
 Parking and major thoroughfares.
 Market trends.
 Visibility.