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    Chapter 6 Retail Location Strategy-Retail Management

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    Venkateshwar Rao. Rokandla
    The document discusses several factors to consider for retail location strategy and site selection. It discusses the importance of location as a major cost and revenue factor. It also outlines three levels of location decision - selecting a city, area within a city, and specific site. Several types of retail locations are identified including free standing, unplanned business districts, and planned shopping centers. Six key factors for site selection and five for selecting a particular shopping center are provided. Central place theory and spatial interaction theory which influence retail location are also summarized. Land value theory and how bid rent varies by distance from the city center are described.

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    Chapter 6 Retail Location Strategy-Retail Management

    Uploaded by

    Venkateshwar Rao. Rokandla
    1K views10 pages
    The document discusses several factors to consider for retail location strategy and site selection. It discusses the importance of location as a major cost and revenue factor. It also outlines three levels of location decision - selecting a city, area within a city, and specific site. Several types of retail locations are identified including free standing, unplanned business districts, and planned shopping centers. Six key factors for site selection and five for selecting a particular shopping center are provided. Central place theory and spatial interaction theory which influence retail location are also summarized. Land value theory and how bid rent varies by distance from the city center are described.

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    The document discusses several factors to consider for retail location strategy and site selection. It discusses the importance of location as a major cost and revenue factor. It also outlines three levels of location decision - selecting a city, area within a city, and specific site. Several types of retail locations are identified including free standing, unplanned business districts, and planned shopping centers. Six key factors for site selection and five for selecting a particular shopping center are provided. Central place theory and spatial interaction theory which influence retail location are also summarized. Land value theory and how bid rent varies by distance from the city center are described.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    1K views10 pages

    Chapter 6 Retail Location Strategy-Retail Management

    Uploaded by

    Venkateshwar Rao. Rokandla
    The document discusses several factors to consider for retail location strategy and site selection. It discusses the importance of location as a major cost and revenue factor. It also outlines three levels of location decision - selecting a city, area within a city, and specific site. Several types of retail locations are identified including free standing, unplanned business districts, and planned shopping centers. Six key factors for site selection and five for selecting a particular shopping center are provided. Central place theory and spatial interaction theory which influence retail location are also summarized. Land value theory and how bid rent varies by distance from the city center are described.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
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    The passage discusses various theories related to retail location strategy including factors influencing location decisions, types of retail locations, factors for selecting shopping centres, and theories like central place theory and spatial interaction theory.

    The types of retail locations discussed are free standing locations, unplanned business districts/centres, and planned shopping centres.

    Five factors that influence the selection of a particular shopping centre are merchants' association, landlord's responsiveness, zoning and planning, lease terms, and building layout.

    Chapter-6

    RETAIL LOCATION STRATEGY

    Importance of location decision

    Location is a major cost factor because it : i. involves large capital investment ii. affects transportation costs iii. affects human resources cost Location is a major revenue factor because it : i. affects the amount of customer traffic ii. affects the volume of business

    Levels of location decision and its determining factors


    A

    retailer takes a location decision based on:

    - selection of a city - selection of an area or type of location within a city - identification of a specific site

    Types of retail location


    Types of locations Types of

    Free standing locations


    neighborhood stores highway stores

    Unplanned business districts/ centres


    downtown or central business district secondary business district suburban business district strip centre

    Planned shopping centres


    regional shopping centres of malls neighbourhood / community specialist markets periodic/ weekly markets

    Site selection analysis

    Six factors to be considered while selecting a site:


    kinds of products sold

    cost factor
    competitors location ease of traffic flow and accessibility parking and major thoroughfares market trends

    visibility

    Selection of a particular shopping centre or market area

    Five factors influence the selection of a particular shopping centre:


    merchants association landlords responsiveness zoning and planning

    lease terms
    building layout

    Central place theory

    Theory established by Christaller and Losch

    - theory attempts to explain the spatial distribution of a settlement


    -central level for a store is the minimum area from which it must draw traffic to be viable - range is a sphere of the settlement of consumers travelling to the central place
    Range Threshold

    - range of a store should be at least equal to its threshold area


    - store will earn profits only if its range is larger than its threshold

    Spatial interaction theory

    Theory discards the assumption made by central place theory that behavior is explained by consumers using the nearest offering of goods or services Theory dates to 1931 from the pioneering studies of William J. Reilly Likelihood that a city or shopping centre will attract shoppers from the hinterland increases with the size of the city or shopping centre and decreases with distance from the city or shopping centre

    Spatial interaction theory contd

    The law of retail gravitation can be supplemented with the knowledge of the location and size of competing centers to develop a boundary around another centre Reillys law of retail gravitation (R, retail attractiveness of a central place or shopping center J to a potential customer residing at I) increases proportionately with the population P (or size in square feet) of J and increases inversely with the square of the distance ij RJ =kpj/dij square

    Land value theory

    - used for analyzing and explaining the arrangementRent per acre of urban land uses Bid rent - analyzes and explains the arrangement of urban function land uses and the location of economic activities within cities - price a bidder is likely to pay will depend on the use of the site - more central the location = more desirable the plot - more central the location = higher price (as different users bid to purchase the land) Distance - retailers require access to consumers more than any other land use function - will be prepared to pay very high rents for city centre locations - bid rent demand from retailers will fall sharply as the distance from the city centre increases (see figure)

    Land value theory (bid rent and urban rent theory) achieved recognition from the work of Haig during 1927

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