Retail Service Mix 2 – Location Management
In this report i will discuss the stages of location and what may prevent them from happening. I will also include the methods of catchment, site selection analysis and comparison. I will also discuss the importance of store location and the recent changes in Marks and Spencers.
1. McGoldrick believes that there are 3 stages in discovering the perfect location for a new store, Search, Viability and Micro.
Search is identifying a location where there could be potential, if a store was to be opened. This could be by investigating the competition and asking the neighbourhood what they feel their community is missing. Viability locates the best available area, and then calculates the possible turnover, by using secondary data research. They may asses this by, evaluating how easy it is to access for both customers and suppliers Micro, examines all the possible sites, so that it fits the needs of the business, it also estimates the potential that a business may have at that location. Before purchasing any properties the company must be aware, that planning permission is necessary by the local council, if they were to consider expanding. This is because they must decide whether they believe the community will benefit from the new business. It is usually easier to open large stores in big city centres, as the councils are trying to bring people back into the city. This is because many years ago the people who lived in the inner city began moving away to the rural areas. As a result of this the inner city stores began to close and the towns where renown for not being a “nice” place. Therefore the council are wanting to open new appealing stores, which will hopefully bring more people back into the town. Not only to give the town good names but increase the revenue and lower the unemployment numbers. It is harder to obtain permission in smaller villages as; councils would prefer to keep the traditional shops open.
2.Although there are certain components that could stop a business from going through these stages such as: Competition
Competition – It is unlikely for small business such as a hairdresser’s, to open up close larger ones as it is more likely that the larger stores, will be able to offer competitive prices and already have loyal customers. However to prevent this happening new businesses must conduct their research before hand, otherwise it may cause problems in the long distance.
Accessibility- All companies must be able to have an entrance to where suppliers can deliver their goods, but also so that their customers are able to access the store easily. Most will not come to the store if they are unable to park their car close or find it hard to park near to the store. This is why most large retail stores check that there are enough spaces or land to accommodate the expected numbers of customers.
Cost- Businesses have to open their stores where they can afford it, which it means it may possibly not be there ideal location. For businesses such as a toy store opening next to Harrods, would be far too expensive and their business wouldn’t succeed.
Population- Large companies such as Tesco would not invest their money in opening in a small village. This is because the locals would be used to shopping from smaller shops, such as a butcher and it is unlikely that they would allow a large retail store to open.
3. A catchment is the form which a town centre, shopping centre or a store draws its customers (Fernie et al 2003)
It can be achieved by completing a customer spot, where you ask a variety of customers how far they have travelled to the shops they shop at. This is a popular way in measuring the catchment area.
The main reasons for why customers travel to stores is because: The amount of shops that are being offered
More parking spaces and cost
Quality and Variety
Kent. T & Ogenyi Omar (2003), Retailing. Palgrave MacMillan. New York
McGoldrick. (1997) Retail Marketing (2nd edn), McGraw-Hill.
Fernie et al (2003) Principles of Retailing – Butterworth Heinemann
David Gilbert (2003) Retail Marketing Management
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