PPT 7-1

5
th
Edition
PPT 7-2
McGraw-Hill/Irwin
Levy/Weitz: Retailing Management, 5/e Copyright !""# $y %he McGraw-Hill Companie&, Inc' (ll right& re&erve)'
Retail Locations
Retail Locations
Chapter 7
Chapter 7
PPT 7-3
Retailing Strategy
Retail Locations
Chapter 7
Site Locations
Chapter 8
Human Resource
Management
Chapter 9
Information and
Distribution
Systems
Chapter !
Customer
Relationship
Management
Chapter
Retail Mar"et and
#inancial Strategy
Chapter $% &
PPT 7-4
What Are the
Three Most Important Things in Retailing?
Location! Location! Location!

PPT 7-5
Retail Locations
Shopping Centers

Strip Shopping Centers

Shopping Malls
City or 'o(n Locations

Inner City

Main Street
#ree Standing Sites
)ther Location )pportunities
PPT 7-6
Types of Strip Shopping Centers

'raditional
Mom and *op Local Merchants%
Children+s *lace% ,ap-ids%
.loc"buster /ideo

*o(er Centers
'arget% Home Depot% )ffice Depot%
*etsMart% .est .uy% Sports 0uthority%
'oys R 1s
PPT 7-7
Elements in Retail Mi
C!stomer
Ser"ice
Merchan#ise
Assortment
$ricing
Comm!nication
Mi
Store %isplay
An# %esign
Location Strategy
PPT 7-8
Strip Shopping Centers
PPT 7-9
Types of Shopping Malls
Regional Centers
S!perregional Centers
Lifestyle Centers
&ashion'Specialty Centers
(!tlet Centers
Theme'&esti"al Centers
Merchan#ise )ios*s
PPT 7-10
Shopping Malls
PPT 7-11
The Largest +,S, Shopping Malls
PPT 7-12
$ro-lems &acing Regional Malls
.
Competition from Alternati"e/ More
Con"enient Locations
.
&oc!s on Apparel – Wea* Apparel Sales
.
Aging
.
%emographic Shifts
PPT 7-13
The Most Epensi"e Shopping
Streets in the Worl#
Street Location Cost 2 s3 foot 2 year
&ifth A"en!e 012th to
32th St,4
37th Street 03th A"e,
to Ma#ison A"e,4
(for# Street
Ma#ison A"en!e 037th
to 75n# St,4
A"e, #es Champs
Elysee
6e7 8or* City
6e7 8or* City
Lon#on
6e7 8or* City
$aris
932:
93::
91::
9;73
9;<:
PPT 7-14
Tra#eoff =et7een Locations
Rent
'raffic
There are relati"e a#"antages
an# #isa#"antages to consi#er
7ith each location,
PPT 7-15
Relati"e A#"antages
of Ma>or Retail Locations
Location City Strip Shopping #ree
Issues Center Mall Standing
Large si?e @ A @ A
#ra7s people
to area
$eople @ @ A A
7or*ing'li"ing
in area
pro"i#e# so!rce
of c!stomers
So!rce of ? A @ A
entertainment'
recreation
$rotection A A @ A
against 7eather
PPT 7-16
Relati"e A#"antages
of Ma>or Retail Locations
Location C.D Strip Shopping #ree
Issues Center Mall Standing
Sec!rity A A @ A
Long/ !niform A @ @ @
ho!rs of
operation
$lanne# A A @ A
shopping
area'-alance#
tenant mi
$ar*ing A @ A @
(cc!pancy ? @ A @
costs
0e,g, rent4
PPT 7-17
Relati"e A#"antages
of Ma>or Retail Locations
Location City Strip Shopping #ree
Issues Center Mall Standing
$e#estrian @ A @ A
traffic
Lan#lor# @ @ A @
control
Strong @ @ A @
competition
Ta ? ? ? ?
incenti"es
PPT 7-18
(ther Retail Location (pport!nities
Mie# +se %e"elopments
Airports
Resorts
Bospitals
Store 7ithin a Store
PPT 7-19
Matching Location to Retail Strategy
.
%epartment Stores  Regional Mall
.
Specialty Apparel Central =!siness %istrict/
Regional Malls
.
Category Specialists  $o7er Centers/
&ree Stan#ing
.
Crocery Stores  Strip Shopping Centers
.
%r!g Stores  Stan# Alone
PPT 7-20
Types of Leases
$ercentage
&ie# A Rate
$ercentage leases – lease based on a % of sales,
Retailers also typically pay a maintenance fee
-ase# on a percentage of their sD!are footage of
lease# space,
Most malls !se some form of percentage lease,
PPT 7-21
Eariations of $ercentage Leases
$ercentage lease 7ith specifie# maim!m A
percentage of sales !p to a maim!m amo!nt,
Re7ar#s retailer performance -y allo7ing retailer
to hol# rent constant a-o"e a certain le"el of sales
$ercentage lease 7ith specifie# minim!m A
retailer m!st pay a minim!m rent no matter ho7
lo7 sales are,
Sli#ing scale A percentage of sales as rent
#ecreases as sales go !p,
PPT 7-22
&ie# Rate Leases
#i4ed Rate Leases A used by community and
neighborhood centers5
6Retailer pays a fi4ed amount per month o7er the life
of the lease5
68ot as popular as percentage leases
,raduated Lease A a 7ariation of the fi4ed rate
lease
6Rent increases by a fi4ed amount o7er a specified
period of time5
PPT 7-23
$ercentage or &ie# Rate Leases
MaintenanceAincreaseAreco!pment
lease A !se# 7ith either a percentage or
fie#
rate lease,
Rent increases if ins!rance/ property
taes/ or !tility -ills increase -eyon# a
certain point,
6et lease A retailer is responsi-le for all
maintenance an# !tilities,
PPT 7-24
$rohi-ite# +se Cla!se
Limits the lan#lor# from leasing to certain tenants,
Some tenants ta*e !p par*ing spaces an# #onFt
-ring in shoppersG bowling alley, skating rink,
meeting hall, dentist, or real estate office,
Some tenants co!l# harm the shopping centerFs
7holesome imageG bars, pool halls, game parlors,
off-track betting establishments, massage parlors
and pornography retailers.
PPT 7-25
Ecl!si"e +se Cla!se
$rohi-its the lan#lor# from leasing to retailers
selling competing merchan#ise
Specify no outparcels
Specify if certain retailer lea7es center% they can
terminate lease,
Escape Cla!se
0llo(s the retailer to terminate its lease if sales don+t
reach a certain le7el after a specified number of
years% or if a specific co6tenant in the center
terminates its lease5
PPT 7-26
En"ironmental Iss!es
HA-o"eAgro!n#I ris*s A such as asbestos6containing
materials or lead pipes used in construction,
Ba?ar#o!s materials A e5g5 dry cleaning chemicals%
motor oil% that ha7e been stored in the ground,
RetailersF $rotection
Stipulate in the lease that the lessor is responsible
for remo7al and disposal of this material if it+s
found5
Retailer can buy insurance that specifically
protects it from these ris"s5
PPT 7-27
(ther Legal Iss!es
9oning and .uilding Codes
9oning determines ho( a particular site can be
used5
.uilding codes determine the type of building%
signs% si:e% type of par"ing lot% etc5 that can be
used
Signs
Restrictions on the use of signs can also impact
a particular site+s desirability
Licensing Re3uirements
Some areas may restrict or re3uire a license for
alcoholic be7erages