Retail Locations

Market and Retail Site Selection

Why is Store Location Important for a Retailer? ¤ Location is typically prime consideration in customer’s store choice. ¤ Location decisions have strategic importance because they can help to develop sustainable competitive advantage. ¤ Location decisions are risky: invest or lease?

Types of Retail Locations

UNPLANNED RETAIL LOCATIONS ¤ Freestanding Sites – location for individual store unconnected to other retailer Advantages:

Convenience High traffic and visibility Modest occupancy cost Separation from competition Few restrictions

UNPLANNED City or Town Locations

Disadvantages

Advantages

¤ Central Business District ¦ Draws people into areas during business hours ¦ Hub for public transportation ¦ Pedestrian traffic ¦ Residents

¦ High security required ¦ Shoplifting ¦ Parking is poor ¦ Evenings and weekends are slow

SHOPPING CENTERS ¤ Group of retail and other commercial establishments that are planned, developed and managed as a single property ¤ CAM – some ask to pay ¤ Anchors ¤ Most shopping centers have at least one or two major retailers ¤ Courted by developer    7-­‐6  

SHOPPING CENTERS ¤ Shopping Center Management Controls: ¤ Parking ¤ Security ¤ Parking lot lighting ¤ Outdoor signage ¤ Advertising ¤ Special events for customers      7-­‐7  

Spike  Mafford/Ge/y  Images    

Types of Shopping Centers ¤ Neighborhood and Community Centers Managed as a unit Attached row of stores

Onsite parking

Types of Shopping CentersShopping Mall ¤ enclosed, climate controlled, lighted shopping centers with retailers on one or both sides of an enclosed walkway.

Advantages and Disadvantages of Shopping Malls Advantages: ¤  Many different types of stores ¤  Many different assortments available ¤  Attracts many shoppers ¤  Main Street for today’s shoppers ¤  Never worry about the weather ¤  Comfortable surrounding to shop ¤  Uniform hours of operation

Disadvantages: ¦ Occupancy costs are high ¦ Tenants may not like mall management control of operations ¦ Competition can be intense

Type of Shopping Centers Lifestyle Center

¤ Usually located in affluent residential neighborhoods ¤ Includes 50K sq. ft. of upscale chain specialty stores ¤ Open-air configuration ¤ Design ambience and amenities ¤ Upscale stores ¤ Restaurants and often a cinema or other entertainment ¤ Small department store format may be there

Type of Shopping Center Outlet Center ¤ These shopping centers contain mostly manufacturers and retail outlet stores

Type of Shopping Center – Theme/Festival Centers ¤ Shopping centers with a unifying theme ¤ Restaurant and entertainment

Mixed Use Development ¤ Combine several different uses into one complex ¤ Shopping center, office towers, hotels and residential complex, civic centers and convention center.

10 Largest Shopping Centers in the World (by GLA) 11: SM Megamall - 3.74 million sq ft - 1000+ stores 10. West Edmonton Mall - 3.77 million sq ft – 800 stores

10 Largest Shopping Centers in the World (by GLA) 9. Dubai Mall – 3.77 million sq. ft – 1,200 stores but biggest in terms of land area 12.1 M sq. ft

10 Largest Shopping Centers in the World (by GLA) 8. Mall Taman Anggrek (Indonesia) – 3.9 M sq ft – 526 stores 7. SM Mall of Asia – 4.2 M sq ft 1080+ tenants

10 Largest Shopping Centers in the World (by GLA) 6. Sunway Pyramid (Malaysia) – 4.27 M sq. ft -800+ stores 5. Midway Valley (Malaysia) 4.5 M sq. ft 500+ stores

10 Largest Shopping Centers in the World (by GLA) 4.  Persian Gulf Complex (Iran) 4.8 M sq. ft – 2500 stores

3. 1 Utama  (Malaysia)   5  M  sq.  5  –  700+  stores    

10 Largest Shopping Centers in the World (by GLA) 2. SM North Edsa – 5.2 M sq. ft - 1,100 stores 1. Golden Resources Mall (China) 6 M sq. ft – 1,300 stores

Other Retail Location Opportunities

Airports ¤ Airports: Why wait with nothing to do? ¤ Rents are 20% higher than malls ¤ Best airports are ones with many connecting flights

Temporary Locations ¤ Pop-­‐up  stores     ¤ stores  in  temporary  loca?ons  that   focus  on  newproducts  or  a  limited   group  of  products.    

Stores within Stores ¤ Department stores - leased space to other retailers, such as sellers of fine jewelry, furs, or high-end designer brands. ¤ Grocery stores - service providers like coffee bars, banks, film processors, and medical clinics.

Merchandise Kiosk ¦ small temporary selling stations located in walkways of enclosed malls, airports, train stations or office building lobbies.

Resorts ¤  Captive audience ¤  Well-to-do customer ¤  Customers have time to shop

HOSPITALS ¤ Patients cannot leave ¤ Gifts are available