Store Location: Methods and Issues Flashcards
Why is store location important?
- Customer targeting - know where the target market is (geodemographics)
- Existing store performance - how does actual performance compare with predicted?
- New store performance
- New products - e.g. some products will require affluent target market
- Store closure/relocations
- New uses - mergers, e-commerce etc.
What are the three types of store location teams?
- Administrative departments
- Responsive departments
- Proactive departments
Who identified the 3 types of store location teams?
Woods and Reynolds, 2011
Administrative departments
Little appreciation of location planing
Unlikely to be stand alone spatial planners
Responsive departments
Greater appreciation of location planning; present site assessments to board but little control on outcomes
Proactive departments
Highly valued e.g. Tesco
Sales forecasting part of investment appraisal
Sit on board and advise store locations
5 barriers to retail growth in 1990s
PPG6, 1996 Competition commission Perceived market saturation E-commerce Increased competition - Thatcher deregulated markets
What is disintermediation?
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
3 ‘New kids on the block’ in terms of being key spatial players in the retail sector
Hard discounters e.g. Poundland
Development of Independents (ethnic) - increased last 10/15 years due to immigration
Betting/money shops
Grocery market today constructed of 3 types of stores:
Superstores
Discounters
Convenience
Superstores and niche spatial marketing
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
Discounters and niche spatial marketing
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
Convenience and niche spatial marketing
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
Hood et al., 2011 ‘clustering’ theory of convenience locations
City centres - transport networks
City centres - workplace activity
Urban suburbs
Market towns - affluent, lower income, countryside
Convenience stores at transport locations
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
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?
- Grocer was not a new entrant to the local area
- Total no. fascias in local area was less than three
- Grocer would get 60% of sales
Why were the three conditions not introduced?
Because its premise meant that rural areas wouldn’t get any stores - result in inadequate and unequal provision
What is niche spatial marketing?
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
Why did disintermediation occur?
Due to increased competition - retailers had to look for a way to reduce costs and maintain control over the supply chain
New entrants (e.g. money lending stores) and niche spatial marketing
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
How is tourism being incorporated into retail planning?
Some retailers beginning to incorporate tourism figures into their store location and product choice e.g. Cornwall (NEWING ET AL., 2013)
What do these niche spatial marketing strategies tell us about today’s retail planning and use of geography?
That geography is not dead in retail - site location teams have never been busier
