Store Location: Methods and Issues

Question 1

Why is store location important?

Answer 1

1. Customer targeting - know where the target market is (geodemographics)
2. Existing store performance - how does actual performance compare with predicted?
3. New store performance
4. New products - e.g. some products will require affluent target market
5. Store closure/relocations
6. New uses - mergers, e-commerce etc.

Question 2

What are the three types of store location teams?

Answer 2

1. Administrative departments
2. Responsive departments
3. Proactive departments

Question 3

Who identified the 3 types of store location teams?

Answer 3

Woods and Reynolds, 2011

Question 4

Administrative departments

Answer 4

Little appreciation of location planing

Unlikely to be stand alone spatial planners

Question 5

Responsive departments

Answer 5

Greater appreciation of location planning; present site assessments to board but little control on outcomes

Question 6

Proactive departments

Answer 6

Highly valued e.g. Tesco
Sales forecasting part of investment appraisal
Sit on board and advise store locations

Question 7

5 barriers to retail growth in 1990s

Answer 7

PPG6, 1996
Competition commission
Perceived market saturation
E-commerce
Increased competition - Thatcher deregulated markets

Question 8

What is disintermediation?

Answer 8

Taking the ‘middle man’ out of the supply chain to reduce costs.
E.g. creation of Nike stores to get rid of middle man, i.e. Sports Direct

Question 9

3 ‘New kids on the block’ in terms of being key spatial players in the retail sector

Answer 9

Hard discounters e.g. Poundland
Development of Independents (ethnic) - increased last 10/15 years due to immigration
Betting/money shops

Question 10

Grocery market today constructed of 3 types of stores:

Answer 10

Superstores
Discounters
Convenience

Question 11

Superstores and niche spatial marketing

Answer 11

Building in food deserts - stores can be built if retailer can prove there is a justified need for provision

Land Banking - argument that retailers bought up greenfield sites with the knowledge that PPG6 was being introduced

Question 12

Discounters and niche spatial marketing

Answer 12

Entered UK in 1990s in deprived areas

Change in consumer demographic - rise in A/B group

Aldi - 5.5% market share

Space for expansion in London - London underprovided for compared with pop. size

Question 13

Convenience and niche spatial marketing

Answer 13

Increased between 2000 and 2012 from £19bn to £33.9bn

PPG6 meaningless at this scale, so Big 4 take advantage

Huge growth in number of Symbol Groups e.g. Budgens, due to changing lifestyles - increase in ‘top ups’ rather than weekly shops

Question 14

Hood et al., 2011 ‘clustering’ theory of convenience locations

Answer 14

City centres - transport networks
City centres - workplace activity
Urban suburbs
Market towns - affluent, lower income, countryside

Question 15

Convenience stores at transport locations

Answer 15

Train stations - M&S have 10% convenience market share

Forecourts/services - Tesco and Esso partnership

Underground - Waterloo tube station has 84.12mil people passing through a year - huge market

Question 16

What were the three conditions proposed by the Competition Commission that had to be failed in order for a store to be not be granted permission?

Answer 16

1. Grocer was not a new entrant to the local area
2. Total no. fascias in local area was less than three
3. Grocer would get 60% of sales

Question 17

Why were the three conditions not introduced?

Answer 17

Because its premise meant that rural areas wouldn’t get any stores - result in inadequate and unequal provision

Question 18

What is niche spatial marketing?

Answer 18

Increased pressure on traditional growth models due to the barriers to growth of the 1990s, have lead to retailers finding new expansion strategies and retail spaces

Question 19

Why did disintermediation occur?

Answer 19

Due to increased competition - retailers had to look for a way to reduce costs and maintain control over the supply chain

Question 20

New entrants (e.g. money lending stores) and niche spatial marketing

Answer 20

Money/betting shops took advantage of austerity measures

Located in most deprived locations with high unemployment

BIRKIN ET AL., 2016 argue there is a positive correlation between austerity measures, bank closures and money-lending store openings

Question 21

How is tourism being incorporated into retail planning?

Answer 21

Some retailers beginning to incorporate tourism figures into their store location and product choice e.g. Cornwall (NEWING ET AL., 2013)

Question 22

What do these niche spatial marketing strategies tell us about today’s retail planning and use of geography?

Answer 22

That geography is not dead in retail - site location teams have never been busier