Retail Locations

Chapter 7
Prepared by: Cheryl Y. Dulay
• The two basic types of location are
unplanned (freestanding and
urban sites) and planned
TYPES OF RETAIL
(shopping centers). Unplanned
locations do not have any LOCATIONS
centralized management that
determines what stores will be in a
development, where the specific
stores will be located, or how they
will be operated. In planned
locations, a shopping center
developer and/or manager makes
and enforces policies that govern
store operations, such as the hours
that a store must be open.

• Such managers also are

responsible to maintain common
facilities such as the parking area—
an arrangement referred to as
common area maintenance
(CAM)—and provide security,
parking lot lighting, outdoor
signage for the center, advertising,
special events to attract
consumers, and so on.
• Gross leasable area
(GLA) is the real estate
industry’s term for the
total floor area
designed for the
retailer’s occupancy
and exclusive use,
including any
basements,
mezzanines, or upper
floors.
• The trade area is the
geographic area that
encompasses most of
the customers who
would patronize a
specific retail site.
1. Freestanding sites are retail
locations for an individual, isolated
store unconnected to other stores; UNPLANNED LOCATIONS
however, they might be near other
freestanding stores or near a
shopping center.

2. Urban Locations
• Urban areas offer three main
types of locations: the central
business district, inner city, and
gentrified residential areas.
Across these areas, retailers are
revising their offerings to reflect
the restrictions associated with
these locations. Central Business
District The central business
district (CBD) is the traditional
downtown financial and business
area in a city or town. Due to its
daily activity, it draws many
people and employees into the
area during business hours.
Inner City During the 1970s and 1980s,
many U.S. and some European cities
experienced urban decay. Urban decay
is the process of a previously functioning
city, or part of a city, falling into
disrepair.

The inner city is a low-income residential

area within a large city. Empty lots,
buildings, and condemned houses
attract criminal activity, making living in
the inner city relatively dangerous.
The Gentrified Residential Areas As the
description of inner-city locations
suggests, they may go through a
process of gentrification—the renewal
and rebuilding of offices, housing, and
retailers in deteriorating areas—coupled
with an influx of more affluent people
that displaces the former, lower- income
residents.
• 3.Main Street
• Main Street refers to the
traditional downtown
shopping area in
smaller towns and
secondary shopping
areas in large cities and
their suburbs. Over the
past 30 years, many
downtowns in small U.S.
towns have
experienced decay
similar to that of inner
cities.
SHOPPING CENTERS AND PLANNED RETAIL LOCATIONS
• Most shopping centers
have at least one or two
major retailers, referred to
as anchors, such as
Macy’s, Walmart, or
Kroger.

• Convenience,
Neighborhood, and
Community Shopping
Centers
• Convenience,
neighborhood, and
community shopping
centers (also called strip
shopping centers) are
attached rows of open-air
stores, with onsite parking
usually located in front of
the stores.
• Power Centers
• Power centers are
shopping centers that
consist primarily of
collections of big-box
retail stores, such as
full-line discount stores
(Target), off-price
stores (Marshalls),
warehouse clubs
(Costco), and
category specialists
(Lowe’s, Staples,
Michaels, Barnes &
Noble, Best Buy, Dick’s
Sporting Goods, and
Toys “R” Us).
• Enclosed Shopping
Malls
• Enclosed shopping
malls have several
advantages over
alternative
locations. First,
shopping malls
attract many
shoppers and have
a large trade area
because of the
number of stores
and the opportunity
to combine
shopping with an
inexpensive form of
entertainment.
• Lifestyle Centers
• Lifestyle centers are
shopping centers
that have an open-
air configuration of
specialty stores,
entertainment, and
restaurants, with
design ambience
and amenities such
as fountains and
street furniture.
• Mixed-use
developments
(MXDs) combine
several different uses
into one complex
including retail,
office, residential,
hotel, recreation, or
other functions. They
are pedestrian-
oriented and
therefore facilitate a
live-work- play
environment.
• Outlet Centers
• Outlet centers are
shopping centers that
contain mostly
manufacturers’ and
retailers’ outlet stores.
Some outlet centers have
a strong entertainment
• component, including
movie theaters and
restaurants to keep
customers on the premises
longer. For example, the
Outlets at Orange, in
Orange, California, has a
multiplex theater, with an
IMAX movie theater;
a children’s play area; and
Thrill It Fun Center.
• Theme/Festival Centers
• In theme/festival centers,
a unifying theme
generally is reflected
in each individual store,
both in their architecture
and the merchandise
they sell. Theme/festival
centers are a relatively
new
type of shopping center.
In the late 1970s, a
private developer took
Boston’s historic Faneuil
Hall and reconceived it
as a “festival
marketplace.”
• Larger, Multiformat
Developments
• New shopping center
developments are combining
enclosed malls, lifestyle
centers, and power centers.
Although centers of this type
do not have an official name,
they reasonably might be
referred to as omnicenters.
• Omnicenters represent a
response to several trends in
retailing, including the desire of
tenants to lower CAM charges
by spreading the costs among
more tenants and to function
inside larger developments
that generate more pedestrian
traffic and longer shopping
trips. In addition, they reflect
the growing tendency of
consumers to cross-shop,
which is a pattern of buying
both premium and low-priced
merchandise or patronizing
 • Pop-Up Stores and Other Temporary
Locations
• Pop-up stores are stores in temporary
locations that focus on new products or a
NONTRADITONAL limited group of products. These “stores”
have been around for centuries as
LOCATIONS individuals sold merchandise on city
streets and at festivals or concerts, such
as the Newport Jazz Festival, weekend
craft fairs, or farmers’ markets.

• Store-within-a-Store
• Store-within-a-store locations involve an
agreement in which a retailer rents a part
of the retail space in a store operated by
another independent retailer. The host
retailer basically “sublets” the space to
the store-within retailer.42 The store-within
retailer manages the assortment,
inventory, personnel, and systems
• Merchandise Kiosks
• Merchandise kiosks are
small selling spaces,
typically located in the
walkways of enclosed
malls, airports, college
campuses, or office
building lobbies.
• Some are staffed and
resemble a miniature
store or cart that could
be easily moved. Others
are twenty-first-century
versions of vending
machines, such as the
Apple kiosks that sell
iPods and other high-
volume Apple products.
LOCATION AND RETAIL STRATEGY
Shopping Behavior of Consumers in
Retailer’s Target Market
• A critical factor affecting the type
of location that consumers select
to visit is the shopping situation in
which they are involved. Three
types of shopping situations are
convenience shopping,
comparison shopping, and
specialty shopping.
• Convenience Shopping When
consumers are engaged in
convenience shopping situations,
they are primarily concerned with
minimizing their effort to get the
product or service they want.
They are relatively insensitive to
price and indifferent about which
brands to buy.
• Comparison Shopping
Consumers involved in
comparison shopping
situations are more involved
in the purchase decision.
They have a general idea
about the type of product
or service they want, but
they do not have a well-
developed preference for a
brand or model.

• Specialty Shopping When

consumers go specialty
shopping, they know what
they want and will not
accept a substitute. They
are brand and/or retailer
loyal and will pay a
premium or expend extra
effort, if necessary, to get
exactly what they want.
 • A second, but closely
Density of Target Market related, factor that
affects the retailer’s
choice of location type is
the density of the retailer’s
target market in relation
to the location. A good
location has many
people in the target
market who are drawn to
it.

• Uniqueness of Retail
Offering
• Finally, the convenience
of their locations is less
important for retailers with
unique, differentiated
offerings than for retailers
with an offering similar to
other retailers.
 SOCIETAL AND LEGAL CONSIDERATIONS
• Urban Sprawl
• Urban sprawl is the increased
expansion of residential and
shopping center development in
suburban and rural areas outside of
their respective urban centers.

• Opposition to Big-Box Retailers

• Retailers that operate big-box
stores like Walmart, Target, Costco,
and Home Depot often meet with
a great deal of resistance when
they plan to build a store in a
community. Many people
vehemently oppose big-box stores
entering their community.
• Zoning
• Local governments in the United States use zoning to regulate land uses in
specific areas to prevent any interference with existing uses by residents or
businesses, as well as encourage the preservation of a community’s sense of
identity.

• Building Codes
• Building codes are legal restrictions that specify the type of building, signs,
size and type of parking lot, and so forth that can be used at a particular
location. Some building codes require a certain-sized parking lot or a
particular architectural design. In Santa Fe, New Mexico, for instance,
building codes require that buildings keep a traditional mud stucco (adobe)
style.
• Signs Restrictions on the use of signs
can affect a particular site’s
desirability. Sign sizes and styles may be
restricted by building codes, zoning
ordinances, or even the shopping
center management group.

• Licensing Requirements Licensing

requirements may vary in different parts
of a region. For instance, some Dallas
neighborhoods are dry, meaning no
alcoholic beverages can be sold; in
other areas, only wine and beer can
be sold. Such restrictions can affect
retailers other than restaurants and bars.
End