Retail Store Locations

The Great India Place,

Sector-38A, Noida
The Great India Place
 The Great India Place is one of the largest malls and
most opulent mall in India and host to several fashion
and lifestyle brands. With 1,500,000 sq ft of retail space,
there is every single brand and product on their shelves.
From ethnic wear to international fashion brands,
apparel and accessories are a big part of their
repertoire. Select fine dining facilities, fast foods and
international chains cover the food and beverage
options for guests. An international standard amusement
park and five star hotel are in the offing as well.
 Inorbit Mall, Mumbai
 Located in the country's commercial capital, Mumbai, Inorbit,
Malad is one of the finest malls the country has ever seen.
Conceptualized by the world renowned UK based Chapman
Taylor Partners, the mall, of universal class and appeal, seeks to
provide a one-stop destination for all the famous and top-notch
brands-all under one roof, lifestyle, food, and entertainment
leading to an international shopping experience for families.
Inorbit is keeping its commitment to be the finest chain of malls in
Asia and set benchmarks in retailing, Inorbit Mall is now expanding
to Vashi, Hyderabad, Pune and other cities across India.
Location Decisions
 Long-term decisions
 Difficult to reverse
 Affect fixed & variable costs
◦ Transportation cost
 As much as 25% of product price
◦ Other costs: Taxes, wages, rent etc.
 Objective: Maximize benefit of location to
firm
When Location is Important
 Setting up a New store
 Expansion of any type
 Shifting of Merchandise market
 New Branch
 Difficulty in renewal of lease
 Infrastructural Issues
 Government Policies
Target Market & Store Location
 Home Country Vs Abroad
 Selection of the region
 Selection of the locality
 Selection of the exact store.
Location Decision Sequence
Country Region/Community

Site
Factors Affecting Country
 Government rules, attitudes, stability,
incentives
 Culture & economy
 Market location
 Labor availability, attitudes, productivity,
and cost
 Availability of supplies, communications,
energy
 Exchange rate
Region Location Decisions
 Corporate desires
 Attractiveness of region (culture, taxes, climate,
etc.)
 Labor, availability, costs, attitudes towards unions
 Costs and availability of utilities
 Environmental regulations of state and town
 Government incentives
 Proximity to customers & suppliers
 Land/construction
Factors Affecting Site

 Site size and cost

 Air, rail, highway, and waterway systems

 Zoning restrictions

 Nearness of services/supplies needed

 Environmental impact issues

Organizations That Need To Be Close to
Markets
 Government agencies
◦ Police & fire departments
◦ Post Office
 Retail Sales and Service
◦ Fast food restaurants, supermarkets, gas stations
◦ Drug stores, shopping malls
◦ Bakeries
 Services
◦ Doctors, lawyers, accountants, barbers
◦ Banks, auto repair, motels
Location, Location, Location

 Connectivity  parking availability

 population size and  nature of nearby

traits stores

 competition  property costs

 transportation access  length of agreement

 legal restrictions
 Trading-Area Analysis

A trading area = a geographic area

containing the
customers of a particular firm or group
of firms
for specific goods or services
 Benefits of Trading Area Analysis

 Discoverconsumer demographics and

socioeconomic characteristics

 determine promotional activities

 learn media coverage patterns

 Benefits of Trading Area Analysis

effectsof trading area overlap

Learn if competitors will open
nearby
Discover ideal number of outlets,
Learn geographic weaknesses
transportation & other issues
Trading Areas of Current and
Proposed Outlets
Types of Trade Areas
 Size and Shape of Trading Areas

 Primary trading area –

50-80% of a store’s customers
 Secondary trading area –
15-25% of a store’s customers
 Fringe trading area –
all remaining customers
Demand Density
 It is the evaluation of how probable
demand for retailer’s offerings is
concentrated in the different target
markets.
 Helps in understanding the demand
potential in a target market.
 Also applicable in marketing and
advertising fields.
Supply Density
 It refers to the measure of how the
potential requirements for a particular
product are fulfilled by existing retailers
irrespective of any size.
 Explore the gap between the market
demand and market supply.
 Five chain drivers of supply density-
Procurement, Merchandise management,
Store Location, Transportation and
Information.
Site Availability
 It is the final step in selecting a site
location.
 For how many years the landlord is
agreed upon giving land on lease basis?
 What various taxes will be applicable and
when?
Destinations Vs. Parasites

Destination stores
have a better assortment, better
promotion, and/or better image

 generate trading areas larger than

competitors
Destinations Vs. Parasites

Parasite stores
do not create their own traffic and
have no real trading area of their own
 These stores depend on
 people who are drawn to the area
 for other reasons
 Trading Areas and Store Types

Largest
Department stores

Supermarkets
TRADING
AREAS Apparel stores

Gift stores

Smallest Convenience stores

Retail Location Theories
Retail Gravity Theory
Suggests that there are underlying
consistencies in shopping behavior that
yield to mathematical analysis and
prediction based on the notion or
concept of gravity.
 Retail Location Theories
Reilly’sLaw of Retail Gravitation based on
Newtonian gravitational principles, explains
how large urbanized areas attract customers
from smaller rural communities.
This theory suggests that two cities attract
trade from intermediate place in direct
proportion to population of two cities and in
inverse proportion to the square of the
distance from these cities to the intermediate
place.
Retail Location Theories
(Ba/Bb)= (Pa/Pb)(Db/Da)2

• Ba = Business which city a draws from the intermediate

place
• Bb = Business which city b draws from the intermediate
place
• Pa = Population of city a
• Pb = Population of city b
• Da = Distance of city a to the intermediate place
• Db = Distance of city b to the intermediate place
Retail Location Theories
Saturation Theory
Examines how the demand for goods and
services of a potential trading area is
being served by current retail
establishments in comparison with other
potential markets.
Retail Location Theories
Retail Store Saturation is a condition
where there is just enough store facilities
for a given type of store to efficiently and
satisfactorily serve the population and
yield a fair profit to the owners.
Under-stored is a condition in a
community where the number of stores
in relation to households is relatively low
so that engaging in retailing is an
attractive economic endeavor.
Retail Location Theories
Overstored is a condition in a
community where the number of stores
in relation to households is so large that
engaging in retailing is usually unprofitable
or marginally profitable.
Retail Location Theories
Buying Power Index (BPI) is an
indicator of a market’s overall retail
potential and is composed of the
weighted measures of effective buying
income (personal income, including all
nontax payments such as social security,
minus all taxes), retail sales, and
population size.
Geographic Information Systems
 A tool that allows geographers and
analysts to visualize data in several
different ways in order to see patterns
and relationships in a given area or
subject. These patterns generally appear
on maps but they can also be found on
globes or in reports and charts.
Business Decisions for World Wide
Brand Building
 In the 1990s, Tesco started to expand its operations outside
the UK. In Eastern Europe, it has met growing consumer
aspirations by developing stores in Poland, Hungary, Slovakia
and the Czech Republic. It has also expanded into Taiwan,
Thailand and South Korea.
 MapInfo’s software has played a vital role in helping the
organization to penetrate these markets, ensuring that
stores are located in the right places to attract profitable
customers and serve the precise needs of the local
community. It is currently being used to assess new
opportunities in China and Japan and is an invaluable tool in
the development of Tesco’s global strategy.
MapInfo
 MapInfo’s Drivetime product has allowed Tesco to generate
catchment maps around proposed sites, allowing them to
see how many customers they are likely to attract and how
they would travel to that site. As a consequence, modeling
strategies can be increased in sophistication. For example,
prospective customers may only be a few miles from the
store, but it may take them an extremely long time to reach
it because of the existing road network and transport
infrastructure. Using the software, Tesco can quickly and
easily find out if an alternative site might attract more
relevant customers.
 Chief Factors in Evaluating Retail
Trading Areas

 Population size & characteristics

 Availability of labor
 Closeness to suppliers
 Economic base
 Competitive situation
 Store location availability
 Regulations & zoning
 Chief Factors in Evaluating Retail
Trading Areas

Population Size and Characteristics

 Total size and density  Total disposable
 Age distribution income
 Average educational  Per capita disposable
level income
 Percentage of  Occupation
residents owning distribution
homes
 Trends
Chief Factors in Evaluating Retail
Trading Areas

Availability of Labor
Management
 Management trainees
 Clerical
 Chief Factors in Evaluating Retail
Trading Areas

Closeness to Sources of Supply

 Delivery costs  Number of
 Timeliness wholesalers
 Number of  Availability of product
manufacturers lines
 Reliability of product
lines
 Chief Factors in Evaluating Retail
Trading Areas

Economic Base
 Dominant industry  Freedom from
 Extent of economic and
diversification seasonal fluctuations
 Growth projections  Availability of credit
and financial facilities
 Chief Factors in Evaluating Retail
Trading Areas

Competitive Situation
 Number and size of  Short-run and long-
existing competition run outlook
 Evaluation of  Level of saturation
competitor strengths
and weaknesses
 Chief Factors in Evaluating Retail
Trading Areas

Availability of Store Locations

 Number and type of  Owning versus leasing
store locations opportunities
 Access to  Zoning restrictions
transportation  Costs
 Chief Factors in Evaluating Retail
Trading Areas

Regulations
 Taxes  Minimum wages
 Licensing  Zoning
 Operations
Store Location

Freestanding or Isolated Store

Part of Business District.

Part of Shopping Centre.