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2nd yr | 1st Sem | Retail Management > Module 8: Retail Site Location > Flashcards

Module 8: Retail Site Location Flashcards

1
Q

FACTORS AFFECTING THE DEMAND FOR A RETAIL OR TRADE AREA: (4)

A

Economic Conditions
Competition
Strategic Fit with the Target Market
Cost of Operating Stores

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2
Q

NUMBER OF STORES IN TRADING AREA

A

An ADVANTAGE of locating multiple stores is ACHIEVING ECONOMIES OF SCALE in PROMOTION AND DISTRIBUTION

However, SALES CANNIBALIZATION is likely to occur when locating too many stores, thus retailer suffers diminishing returns.

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3
Q

is likely to OCCUR WHEN LOCATING TOO MANY STORES, thus RETAILER SUFFERS DIMINISHING RETURNS.

A

Sales Cannibalization

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4
Q

FACTORS TO CONSIDER IN EVALUATING A SITE FOR LOCATING A RETAIL STORE:
(3)

A

A. Site characteristics
B. Characteristics of trading area
C. Estimated potential sales

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5
Q

A. Site characteristics

A

i. Traffic flow and accessibility
ii. Location characteristics

iii. Restrictions and Cost
iv. Locations within a Shopping center

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6
Q

A. Site characteristics

A

i. Traffic flow and accessibility
ii. Location characteristics

iii. Restrictions and Cost
iv. Locations within a Shopping center

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7
Q

ii. Location characteristics
(3)

A
  1. Parking Congestion
  2. Store visibility
  3. Existence of adjacent retailers
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8
Q

is an EXCESS LEVEL OF TRAFFIC that results in customer delays

A

Parking Congestion

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9
Q
  • refers to the CUSTOMERS ABILITY TO SEE FROM THE STREETS
A

Store visibility

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10
Q

this principle states that
a CLUSTER OF SIMILAR OR COMPETING RETAIL ACTIVITIES will have a greater drawing power than isolated
stores that engage in the same retailing activities

A

Cumulative Attraction

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11
Q

is a CONTIGUOUS GEOGRAPHIC AREA that accounts for the
majority of a store’s sales and customers

A

trade area

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12
Q

Characteristics of trading area

A

Primary (within 5min drive) 3miles
Secondary (10min drive) 5miles
Tertiary (15min drive) 10 miles

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13
Q

is one that DOES NOT CREATE ITS OWN TRAFFIC and whose
trade area is determined by the dominant retailer in the shopping center or retail area

A

Parasite store

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14
Q

is the PROCESS OF LOCATING THE RESIDENCES of CUSTOMERS for a store on a map and displaying their positions relative to the store location.

A

Customer spotting

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15
Q

Estimated potential sales. This can be done by following these steps:
(4)

A
  1. Do a competitive analysis.
  2. Define present trade area.
  3. Analyze trade area characteristics.
  4. Match characteristics of present trade area with potential sites.
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16
Q

NEGOTIATING A LEASE
(2)

A
  1. Percentage Lease
  2. Fixed Rate Lease
17
Q
  • in which the RENT IS BASED on a PERCENTAGE OF SALES
A

Percentage Lease

18
Q

3 types of percentage lease

A

a. percentage lease with a specified maximum
a. Percentage lease with a specified minimum
b. Sliding scale lease

19
Q

is a lease that PAYS A LESSOR
or landlord, a PERCENTAGE OF SALES UP to a MAXIMUM AMOUNT.

A

percentage lease with a specified maximum

20
Q

specifies that the RETAILER MUST
PAY A MINIMUM RENT, no matter how low sales are.

A

Percentage lease with a specified minimum -

21
Q

percentage of sales paid as rent decrease as the sales go up.

A

Sliding scale lease

22
Q

2 types of Fixed Rate Lease

A

a. Graduated Lease
a. Maintenance-increase recoupment lease

23
Q
  • in which RENT INCREASES BY A FIXED AMOUNT OVER A SPECIFIED PERIOD OF TIME
A

Graduated Lease

24
Q

can be USED with EITHER A
PERCENTAGE or FIXED-RATE lease. This type of lease allows the landlord to increase the rent if insurance, property taxes, or utility bills increase beyond a certain point

A

Maintenance-increase recoupment lease -

25
Q

TERMS OF THE LEASE
(3)

A
  1. Cotenancy Clause
  2. prohibited-use clause
  3. exclusive-use clause
26
Q

HELPS THE RETAILER TO MAINTAIN ITS SALES BY HAVING A MAJOR RETAILER in a shopping center. The lease depends on the existence of a major retailer. If that major retailer (anchor) leaves, then the lessor may demand rent reductions or can leave together with the other retailers.

A

Cotenancy Clause

27
Q

Limits the land lord from leasing to certain kinds of tenants

A

Prohibited-use clause

28
Q

Prohibits the land lord from leasing to retailers that sell competing products

A

Exclusive-use clause

2nd yr | 1st Sem | Retail Management (9 decks)

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