Page 103 - DMGT550_RETAIL_MANAGEMENT

Retail Management

Notes well-established specialty stores in a downtown area. This type of store seems to thrive in the
downtown setting.
Free Standing Locations

This type of retail location is basically any stand-alone building. It can be tucked away in a
neighborhood location or right off a busy highway. Depending on the landlord, there are
generally no restrictions on how a retailer should operate his business. It will probably have
ample parking and the cost per square foot will be reasonable. The price for all that freedom
may be traffic. Unlike the attached retail locations where customers may wander in because they
were shopping nearby, the retailer of a free standing location has to work at marketing to get
the customer inside.
Office Building
The business park or office building may be another option for a retailer, especially when they
cater to other businesses. Tenants share maintenance costs and the image of the building is
usually upscale and professional.
Home-based

More and more retail businesses are getting a start at home. Some may eventually move to a
commercial store location, while many remain in the business owner’s spare room. This type of
location is an inexpensive option, but growth may be limited. It is harder to separate business
and personal life in this setup and the retailer may run into problems if there isn’t a different
address and/or phone number for the business.

Did u know? Population level, growth congestion and competition alone are not sufficient
factors for retail locations. They must have the right demographic and lifestyle profile.

6.6 Location and Retail Trends

Nationwide, the retail sector enjoyed robust growth during the first half of the decade, due in
great part to the continued expansion of big boxes. The excitement, however, is dying down, as
several category-killer retailers experience slowing sales. The once-zealous players are becoming
more cautious, and once again the rules of the game are changing for developers and commercial
brokers.

New Development Drivers
Traditionally, retail centers have been defined as either regional, community, or neighborhood,
with standard tenants for each of these categories. Recently, though, the lines have blurred, as
discount department stores anchor regional malls and traditional mall tenants move in-line at
strip centers or into freestanding locations.

The three familiar categories have now polarized into either regional or neighborhood locations.
Lackluster performance has caused the retreat or merger of a number of retail chains, both large
and small. The theatre and entertainment group, once shunned by many developers and anchor
retailers, is fast becoming the darling of the industry. And in the wake of continuing retail
bankruptcies and mergers, capital markets are taking a closer look at new development. In fact,
many financial institutions have reallocated funds for property types, dropping retail from the
most-favored status.
With fewer dollars focused on this overbuilt market-and cautious tenants becoming more selective
in choosing new locations-developers and retailers must be more creative. As a result, new
deals will rely less on the credit of the tenant and more on the developer’s use and positioning
of a site as it relates to the market.

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