Chapter 10

Site Selection

The process of choosing an optimal location for a retail store based on factors like foot traffic, sales potential, and business success.

Types of Retail Locations

Different categories including isolated stores, unplanned business districts, and planned shopping centers, each with unique advantages and disadvantages.

Isolated Stores

Standalone stores operating independently, often with:

• Advantages: Lower rent, flexibility in design and operation, good visibility.

• Disadvantages: Difficulty attracting customers, limited variety for shoppers, higher advertising costs.

Unplanned Business Districts:

Clusters of stores that develop organically, including:

• Central Business Districts (CBDs): Downtowns with a mix of retail, office, and residential spaces.

• Secondary Business Districts: Smaller business areas outside the CBD.

• Neighborhood Business Districts: Retail clusters catering to local residents.

• Strings: Linear strips of stores along a road.

Central Business Districts (CBDs)

Downtowns with a mix of retail, office, and residential spaces.

Secondary Business Districts

Smaller business areas outside the CBD.

Neighborhood Business Districts

Retail clusters catering to local residents.

Strings

Linear strips of stores along a road.

Planned Shopping Centers

Purpose-built retail developments with a cohesive design and management, categorized as:

• Neighborhood Centers: Small centers anchored by a supermarket or drugstore.

• Community Centers: Larger centers with a broader range of stores, often including department stores.

• Regional Shopping Centers: Dominant centers with multiple anchor stores, attracting customers from a wider area.

• Superregional Shopping Centers: The largest shopping centers, housing a diverse mix of stores and entertainment options.

Neighborhood Centers

Small centers anchored by a supermarket or drugstore.

Community Centers

Larger centers with a broader range of stores, often including department stores.

Regional Shopping Centers

Dominant centers with multiple anchor stores, attracting customers from a wider area.

Superregional Shopping Centers

The largest shopping centers, housing a diverse mix of stores and entertainment options.

One-Hundred Percent Location

The ideal site that perfectly meets a store's needs in terms of customer traffic, competition, and visibility, though challenging to achieve.

Traffic Considerations

Evaluating pedestrian and vehicular traffic flow, demographics, and shopping trip patterns in the area.

Pedestrian Traffic

The number and type of people walking by the store is crucial. Assess factors like:

• Age and gender demographics (exclude very young children).

• Traffic flow throughout the day.

• Pedestrian interviews to understand shopping habits and destinations.

Parking Considerations

Assessing the number, quality, and proximity of parking spots, along with pricing strategies and industry standards for parking.

Industry Standards for Parking

A general guideline suggests:

• Shopping centers: 4-5 spaces per 1,000 square feet of gross floor space.

• Supermarkets: 10-15 spaces per 1,000 square feet of gross floor space.

• Furniture stores: 3-4 spaces per 1,000 square feet of gross floor space.

Additional Site Evaluation Factors

Considering corner influence, site visibility, and accessibility for pedestrians, vehicles, and public transportation.

Corner Influence

often benefit from increased visibility and pedestrian traffic.

Site Visibility

Ensure good visibility from the street and surrounding areas.

Accessibility

Consider ease of access for pedestrians, vehicles, and public transportation

Terms of Occupancy

Understanding ownership versus leasing options, and different lease types like straight lease, percentage lease, and maintenance-increase lease.

Ownership vs. Leasing

Decide between purchasing the property or entering a lease agreement.

Straight Lease

A fixed monthly rent.

Percentage Lease

Rent based on a percentage of the store's sales.

Maintenance-Increase Lease

Requires the tenant to cover a portion of the property's maintenance costs, which can increase over time.