RETAIL AREA ANALYSIS

PRESENTATION
 Retail Area Analysis refers to the examination or
exploration of the geographic sector that contains
potential customers for a particular retailer or shopping
center.
 There are three (3) basic zones or segments namely,
primary zone, secondary zone and tertiary zone as
shown by the diagram below (figure1.0).
Figure 1.0
Primary
zone

Secondary
zone

Tertiary
zone
(a) Primary zone

 It is the geographic area from which the store or

shopping center derives 60-65% of its customers.
 This is also referred to as the (Central Business
District) CBD, which is traditionally known as the
center of the town.
 It is where businesses established themselves early in
the development of towns or cities.
(b) Secondary zone

 This refers to the geographic area of secondary

importance in terms of customer sales generating about
20% of a store’s sales.
 This is commonly known as the down town area and it
is situated near the CBD and rentals in this sector are
fairly lower as compared with the primary zone.
(c) Tertiary zone

 It is the outer most- ring and it includes customer who

occasionally shop at the store or shopping center.
 It can also be referred to as the industrial area or the
last zone which is situated at the outskirts of the town
or city and it is comprised of the lowest rentals when
compared with the primary and secondary zones.
Mc Cant’s findings
 The most important communication a store has
with its customers is through its location. When
selecting the location of a shop or retail outlet,
certain factors will have to be weighed against
one another.
 Attracting customers will necessitate extra
costs in one way or another. If you pay more
rent for a location that is easily accessible to
customers, say in a shopping mall, you will pay
less for advertising and promotion and vice-
versa”.
Types of location
Typically store location may be:
 Free standing/Isolated store- Solitary site
 Part of a planned Business District
 Part of an unplanned Business District
Isolated store
 A store located along a major traffic artery,
without any competitive retailers around.
 Generally the store is located off the main

road, highway or street.

 Large retailers and medical retailers utilise

isolated sites
 The advantage is limited competition

resulting in lower rental.

 However it is harder to attract traffic to a

solitary site.
Merits of isolated site
 Lack of competition
 Low rental costs
 Lower operating costs which can be passed

on the customer.
 High impact of presence given traffic visibility
 Parking space
 Larger display area and store layout provision
 Location as a differentiating strategy
Demerits of a solitary site
 Difficulty in attracting initial/new customers
 May not have a great deal of gravitational pull
 High promotional costs
 No shared benefit of security
 No shared costs for grounds maintenance

and environmental improvements

The Unplanned Shopping Area/site
 May be a retail location with two or more
outlets in close proximity to each other.
 Buildings may have been converted to retail use
and the ownership is frequently fragmented
among a number of companies or owners.
 A number of retailers will coexist, with perhaps
an oversupply of some business types and a
shortage of others.
 There are no quotas as to number and types of
retail businesses.
Merits of Unplanned site
 Variety of retail choice in a single area
 Ability to compare prices
 Higher traffic of pedestrian
 Access to public transport
 Convenience of saving time by utilising

different stores.
Demerits of Unplanned shopping
site.
 Traffic congestion and parking
 Higher rents and taxes
 Poor conditions of some of the properties in

older city centres

Planned Business sites
 Generally planned business site/district is centrally
managed/owned.
 The key to success of a planned business site is
balanced tenant mix which offer complimentary
merchandise to consumers .
 Designed to attract consumers from greater
distances.
 Should have at least one anchor shop and enough
parking space to attract customers.
 Three types of planned business sites are regional
centres, community centres, and neighbourhood
centres.
Planned shopping centres can assume two
basic configurations that is shopping mall and
strip centre.
a) Shopping mall is one or more buildings
forming a complex of shops representing
merchandisers, with interconnecting walkways
enabling visitors to walk from unit to unit.
Other establishments including movie theaters
and restaurants are also often included.
Strip centre
 A strip centre is an attached row of stores or
service outlets managed as a coherent retail
entity, with on-site parking usually located in
front of stores.
 Does not have enclosed walkways linking the

stores.
 May be configured in a straight line, or have

an “L” or “U” shape.

Regional centre
 A regional mall is, as per the International Council
of Shopping Centers, in the United States, a
shopping mall which is designed to service a larger
area (15 miles) than a conventional shopping mall.
As such, it is typically larger with 37,000 m2 to
74,000 m2 gross leasable area with at least two
anchor stores and offers a wider selection of stores.
Given their wider service area, these malls tend to
have higher-end stores that need a larger area in
order for their services to be profitable but may
have discount department stores. Regional malls are
also found as tourist attractions in vacation areas.
Community Centre
 Community centers (or community malls) are
larger than neighborhood centers, and offer a
wider range of goods. They usually feature two
anchor stores which are larger than that of a
neighborhood center's, e.g. a discount
department store. They may also follow a strip
configuration, or may be L- or U-shaped.
Community centers usually feature a retail
area of 100,000 to 350,000 square feet (9,300
to 32,500 m2) and serve a primary area of 3 to
6 miles (4.8 to 9.7 km).
Neibourhood center
 Neighborhood centers are small-scale malls
serving the local neighborhood. They typically
have a supermarket or a drugstore as an
anchor, and are commonly arranged in a strip
mall format. Neighborhood centers usually
have a retail area of 30,000 to 150,000
square feet (2,800 to 13,900 m2), and serve a
primary area in a 3-mile (4.8 km) radius.
They are sometimes known as convenience
centers
 Superregional centre- Similar to a regional
centre, but is larger than a regional centre,
has more anchors, a deeper selection of
merchandise, and draws from a larger
population base.
 Fashion/Specialty centre- A centre composed

mainly of upscale apparel shops, boutiques

and craft shops carrying selected fashion or
unique merchandise of high quality andf
price
Power centre
A centre dominated by several large anchors,
including discount department stores, off-
price stores, warehouse clubs, or “category
killers,” i.e stores that offers tremendous
selection in a particular merchandise category
at low prices. The centre typically consists of
several freestanding (unconnected) anchors
and only a minimum amount of small specialty
tenants
 Theme/Festival centre- these centres typically
employ a unifying theme that is carried out by
the individual shops in their architectural design
and , to an extent, in their merchandise. The
biggest appeal of these centres is to tourists,
they can be anchored by restaurants and
entertainment facilities.
 Outlet centre-Usually located in rural or

occassionally in tourist location. Outlet centres

consists of mainly manufacturer’s outlet stores
selling their own brands at a discount.
Merits of a planned shopping centre

 Balance and comprehensiveness of the retail

offers
 Freedom for individuals to shop in comfort

and satisfy all their needs in the single centre.

 Creation of a single unified image.
 The ability to increase security and reduce

theft.
Demerits of an unplanned shopping
centre
 Inflexibility stipulated in the retail agreement
such as opening hours.
 Rents may be higher than in other locations.
 Restrictions as to the type of goods which

may be sold by different stores

 Smaller stores may not be as successful as

the more established ones.