What Retailers Seek in Site Selection
May 26, 2011 by Newsfeed Editor
Location, Location, Location. When it comes to buying real estate, those are said to be the top three considerations. For store planners and retail execs charged with finding new locations for expansion or acquisition, finding the right location at the right price is the name of the game. A recent article in Progressive Grocer offered Five Tips for Retail Site Selection. The author taps the expertise of Robert Tack, CEO of Capital Retail Group, a commercial real estate firm.
Tack says that too many retailers looking for new space are focused solely on the rental rate. While budget is always a consideration, he says that there are other key components. For members of NARMS, and specifically the PIC Division, knowing what your customer is looking for can help in providing top level service on new store build outs, remodels, acquisition conversions and relocations. Here are his tips:
Know the customer. Successful retailers employ tools and techniques to measure sales data and shopping demographics. He suggests that the retailer create a grading system using elements such as visibility, access, daytime population, income levels and traffic counts as a basis for compiling a passing or failing grade.
Know the location. Tack says that an acceptable rental rate is not an absolute figure, but is directly related to the sales potential of a location. Higher rates may yield even higher sales levels.
Know the market. This one is probably pretty obvious, but knowing the going rate for real estate in a given market is vital. Keeping options open and having a back-up plan is helpful if an agreement cannot be reached.
Know the neighbors. Surrounding businesses can provide helpful synergies on one hand or damaging competition on the other. Anchor tenants are important, but the profile of the smaller stores and businesses can be just as important.
Know the landlord. Retail leases are not usually short term deals. Tack says they usually are for at least five and more often ten years. That is a long time to live with someone you know nothing about.
If knowing the above information is critical to retail site selection, then it is also critical to providing top flight service to the buyer. At-retail merchandising, marketing and installation service providers should work closely with their retail customers to know this information and do a little research on their own to know what they are walking into.