6/6/2024

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Learning Objectives
LO 8-1 Describe the types of retail locations available to retailers.
LO 8-2 Review the types of unplanned locations.
LO 8-3 Analyze the characteristics of the different types of shopping centers.
LO 8-4 Discuss nontraditional retail locations.
Retail Locations
LO 8-5 Match the locations to the retailer’s strategy.
CHAPTER 8
LO 8-6 Review the societal and legal considerations in selecting locations.

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Introduction Types of Retail Locations 1

Learning Objective 8-1 Describe the types of retail locations available to retailers.
Location is Important
• One of the most influential considerations by consumer.
Two Basic Types
• Can be used to develop sustainable competitive advantage.
• Unplanned locations - do not have centralized management that
• Location decisions are risky: buy or lease? determines what stores will be in a development.
• Planned locations - the shopping center and/or manager makes and
enforces policies that govern store operations.

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Types of Retail Locations 2 Types of Retail Locations 3

Other Factors Selecting Location Type
• Common area maintenance (CAM) – managers are responsible for Retailers consider:
maintaining common facilities. • Size of the trade area.
• Gross leasable area – the total floor area designed for the retailer’s • Occupancy cost of the location.
occupancy. • Pedestrian and vehicle customer traffic.
• Restrictions placed on store operations by the property manager.
• Convenience of the location for customers.

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Unplanned Locations 1 Unplanned Locations 2

Learning Objective 8-2 Review the types of unplanned locations.
Freestanding Sites continued
Disadvantages:
Freestanding Sites
• Limited trade area.
Advantages:
• Little pedestrian traffic.
• Convenience.
• Higher occupancy costs.
• High traffic and visibility.
Outparcels are located on outskirts of a shopping center.
• Modest occupancy costs.
• Advantageous locations for some, such as banks and fast-food restaurants.
• Fewer restrictions.

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Unplanned Locations 3 Redeveloping the Central Business District

Urban Locations
Central business district.
• Draws many people during business hours but slow in evening and weekends.
Inner city.
• Urban decay.
• Food deserts.

Gentrified residential areas.

• Gentrification.
Local leaders developed plans to revitalize its downtown area as Water
Street Tampa, a 55-acre development that features residential high rises,
office spaces, parks, and retail and hotel space.
Access the text alternative for slide images.

© McGraw Hill LLC 9 © McGraw Hill LLC Source: Strategic Property Partners 10

Unplanned Locations 4 Redeveloping Main Street

Main Street
• Traditional downtown shopping area in smaller towns.
• Secondary shopping areas in large cities and suburbs.
• Experienced decay over the past 30 years with advent of big box retailers.
• Redevelopment efforts focus on better shopping experience.
• Don’t draw as many customers as CBD.

Boulder, Colorado, has a thriving Main Street retail scene.

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Shopping Centers and Planned Retail Locations 1 EXHIBIT 8-1 Characteristics of Different Retail Locations
Learning Objective 8-3 Analyze the characteristics of the different types of shopping centers. Annual
Size (000 Trading Area Occupancy Cost Shopping
square feet) (Miles) ($ per sq. ft) Convenience Typical Tenants

Shopping Center Neighborhood and

community shopping
30 to 400* 1 to 6** 8 to 20 High Supermarkets,
discount stores
centers
• Group of retail and commercial establishments that are planned, developed,
Power centers 250 to 600 5 to 10 10 to 20 Medium Category specialists
owned, and managed as a single property.
Regional and super- 400 to 800+ 5 to 25 10 to 70 Low Department and
• Anchors. regional enclosed malls specialty apparel
stores
• Shopping center property management firm. Lifestyle centers 150 to 500 8 to 12 15 to 35 Medium Specialty apparel
and home stores,
restaurants
Outlet centers 50 to 400 25 to 75 8 to 15 Low Off-price retailers
and factory outlets
Theme/festival centers 80 to 250 25 to 75 20 to 70 Low Specialty stores and
restaurants

Sources: International Council of Shopping Centers, “U.S. Shopping-Center Classification and Characteristics,” 2017,
© McGraw Hill LLC 13 © McGraw Hill LLC www.icsc.com/uploads/research/general/US_CENTER_CLASSIFICATION.pdf; personal communications with industry executives 14

Shopping Centers and Planned Retail Locations 2 Shopping Centers and Planned Retail Locations 3
Convenience, Neighborhood, and Community Shopping Centers Power Centers
• Also called strip shopping centers. • Power centers consist of a collection of big-box retail stores.
• Attached rows of open-air stores with parking typically in front of stores. • Have freestanding (unconnected) “anchor” stores and fewer specialty
stores.
• Convenient locations, easy parking, relatively low occupancy costs.
• Limited trade area. • Located near enclosed shopping mall.
• Low occupancy costs.
• Modest consumer convenience.

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Shopping Centers and Planned Retail Locations 4 Shopping Centers and Planned Retail Locations 5
Enclosed Shopping Malls Lifestyle Centers
• Attract many customers. • Resemble main streets in small towns.
• Large trade area. • Design ambience and amenities such as fountains.
• Weather not a factor. • Attractive to specialty retailers.
• Mall management provides level of consistency. • Often part of mixed-use developments.
• High occupancy costs. • Bad weather can impede traffic.
• Some don’t like management control of operations. • Convenient parking.
• Intense competition. • Occupancy costs lower than enclosed malls.
• Older malls unappealing to shoppers.
• Less retail space.
• Overall, mall traffic and sales continue declining.
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Lifestyle Centers Shopping Centers and Planned Retail Locations 6

Resembling main streets in Outlet Centers

small towns, lifestyle centers • Contain mostly manufacturers’ and retailers’ store outlets.
like the Easton Town Center in
Columbus, Ohio, are shopping • Some include entertainment component.
centers that have an open-air
configuration of specialty stores, • Typically in remote locations.
entertainment, and restaurants,
• Lower costs and reduced competition.
with design ambience and
amenities such as fountains and • Tourism provides major source of traffic.
street furniture.

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Shopping Centers and Planned Retail Locations 7 Theme/Festival Centers

Theme/Festival Centers
• Relatively new concept.
• Boston’s historic Faneuil Hall reconceived as “festival marketplace” in late
1970s.
• Often viewed as tourists traps and avoided by locals.

The Grand Canal Shops at the Venetian Hotel in Las Vegas

is a theme/festival center with a unifying theme.

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Shopping Centers and Planned Retail Locations 8 Shopping Centers and Planned Retail Locations 9
Mixed-Use Development Larger, Multiformat Developments
• Mixed-use developments (MXD) combine several different uses into one • Omnicenters combine enclosed malls, lifestyle centers, and power centers.
complex including retail, office, residential, hotel, recreation, or other • Reflect growing tendency of consumers to cross-shop.
functions.
• Appeals to time-scarce customers.
• Live-work-play environment.

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Nontraditional Locations 1 Nontraditional Locations 2

Learning Objective 8-4 Discuss nontraditional retail locations.
Store-within-a-Store
• Store-within-a-store locations involve retailer who rents part of retail space
Pop-Up Stores and Other Temporary Locations operated by another independent retailer.
• Pop-up stores are temporary locations that focus on new products or • Can be mutually beneficial to both.
limited group of products.
Merchandise Kiosks
• Store-within-a-store locations involve retailer who rents part of retail space
operated by another independent retailer. • Merchandise kiosks are typically located in walkways of enclosed malls,
airports, or office buildings.
• Merchandise kiosks are typically located in walkways of enclosed malls,
airports, or office buildings. • Opportunity to generate income in otherwise vacant space.

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Location and Retail Strategy 1 Location and Retail Strategy 2

Learning Objective 8-5 Match the locations to the retailer’s strategy.
Density of Target Market
• Good location has many people in target market who are drawn to it.
Shopping Behavior of Consumers in Retailer’s Target Market
Uniqueness of Retail Offering
Convenience shopping.
• Consumer concerned with minimal effort to get product.
• Convenient location less important for retailers with unique, differentiated
offerings.
Comparison shopping.
• Consumer more involved in purchase decision.
• Destination stores.

Specialty shopping.
• Consumers know what they want and will not accept substitute, willing to pay a premium.

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Societal and Legal Considerations 1 Societal and Legal Considerations 2

Learning Objective 8-6 Review the societal and legal considerations in selecting locations.
Opposition to Big-Box Retailers
• Big-box stores drive local retailers out of business.
Urban Sprawl
• Don’t provide living wage.
• Prior to WWII, downtown was commercial hub and part of social life.
• Hire part-time workers to avoid health insurance benefits.
• Interstate highways and suburban growth changed how Americans live and
work. • Achieve low prices by manufacturing outside U.S.

• Urban sprawl creates congestion, air pollution, concentrated poverty,

racial/economic segregation.
• Migration to suburbs also creates better housing opportunities, public
schools, and less crime.

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Societal and Legal Considerations 3 EXHIBIT 8-2 Zoning Map of Superior, Wisconsin
Zoning
Regulates land use to prevent interference with existing use by residents or
businesses,
Five categories of activities:
• Residential.
• Commercial.
• Mixed residential and commercial.
• Industrial.
• Special.

Access the text alternative for slide images.

© McGraw Hill LLC 31 © McGraw Hill LLC Source: City of Superior, Wisconsin. 32

Societal and Legal Considerations 4 Keywords 1

Building Codes anchor – a large, well-known retail operation located in a shopping center or Internet mall and
serving as an attracting force for consumers to the center.
Signs. building codes – legal restrictions describing the size and type of building, signs, type of
Licensing requirements. parking lot, and so on that can be used at a particular location.
central business district (CBD) – the traditional downtown business area of a city or town.
• Vary by region.
common area maintenance (CAM) – the common facilities maintenance that shopping center
management is responsible for, such as the parking area, providing security, parking lot lighting,
outdoor signage for the center, advertising, and special events to attract consumers.
Building codes in Santa Fe, New Mexico, community shopping center – an attached row of stores, usually with onsite parking in front of
require that buildings keep a traditional the stores. Also known as convenience, neighborhood, or strip shopping center.
mud stucco (adobe) style.
comparison shopping – a type of shopping situation whereby consumers have a general idea
about the type of product or service they want, but they do not have a well-developed
preference for a brand or model.

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Keywords 2 Keywords 3
convenience shopping – when consumers are primarily concerned with minimizing their effort gentrification a process in which old buildings are torn down or restored to create new offices,
to get the product or service they want. housing developments, and retailers.
convenience shopping center – an attached row of stores, usually with onsite parking in front gross leasable area (GLA) – total floor area designated for the retailer’s exclusive use,
of the stores. Also known as neighborhood, community, or strip shopping center. including basements, upper floors, and mezzanines.
cross-shop – a pattern of buying both premium and low-priced merchandise or patronizing inner city – typically a high-density urban area consisting of apartment buildings populated
expensive, status-oriented retailers and price-oriented retailers. primarily by ethnic groups.
destination store – a retail store in which the merchandise, selection, presentation, pricing, or lifestyle center – a shopping center with an outdoor traditional streetscape layout with sit-down
other unique feature acts as a magnet for customers. restaurants and a conglomeration of specialty retailers.
food desert – area that lacks ready access to affordable fresh fruits, vegetables, dairy, whole Main Street – the central business district located in the traditional shopping area of smaller
grains, and other healthful foods, as might be provided by grocery stores or farmer’s markets. towns, or a secondary business district in a suburb or a larger city.
freestanding site – a retail location that is not connected to other retailers. merchandise kiosk – small, temporary selling space typically located in the walkways of
enclosed malls, airports, train stations, or office building lobbies.

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Keywords 4 Keywords 5
mixed-use development (MXD) – development that combines several uses in one complex – pop-up store – store in a temporary location that focuses on new products or a limited group of
for example, shopping center, office tower, hotel, residential complex, civic center, and products.
convention center.
power center – shopping center that is dominated by several large anchors, including discount
neighborhood shopping center – an attached row of stores, usually with onsite parking in stores, off-price stores, warehouse clubs, or category specialists.
front of the stores. Also known as convenience, community, or strip shopping center.
shopping center – a group of retail and other commercial establishments that is planned,
omnicenter – a combination of mall, lifestyle, and power center components in a unified, open-
developed, owned, and managed as a single property.
air layout.
outlet center – typically stores owned by retail chains or manufacturers that sell excess and shopping center property management firm – company that specializes in developing,
out-of-season merchandise at reduced prices. owning, and maintaining shopping centers.
outparcel – a building or kiosk that is in the parking lot of a shopping center but isn’t physically specialty shopping – shopping experiences when consumers know what they want and will
attached to a shopping center. not accept a substitute.
planned location – shopping center for which management enforces policies governing store store-within-a-store – an agreement in which a retailer rents a portion of retail space in a store
operations, such as operating hours and also maintains common facilities such as parking operated by a different, independent retailer.
area and provides security, parking lot lighting, outdoor signage, advertising, and special
events to attract customers.
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Keywords 6
strip shopping center – an attached row of stores, usually with onsite parking in front of the
stores. Also known as convenience, neighborhood, or community shopping center.
theme/festival center – a shopping center that typically employs a unifying theme that is
carried out by the individual shops in their architectural design and, to an extent, their
merchandise.
trade area – a geographic sector that contains potential customers for a particular retailer or
shopping center.
unplanned location – freestanding and urban retail locations that lack any centralized
management to determine which stores locate in them or how they operate.
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urban decay – the process by which a previously well-functioning area falls into disrepair.
urban sprawl – expansions of residential and shopping center developments into suburban or
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rural areas, beyond urban centers.
zoning – the regulation of construction and use of buildings in certain areas of a municipality.

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