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Retail Store

Location Analysis

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Classification of Retail locationsCentral Business District – Main Shopping Centre of city

M G Road, JM Road, Laxmi Road, une

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Secondary Business District – !C Road, "ar#e Road, "had$i

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%ypes of Retail locationsSu&ur&an Business District

"alyani nagar,une

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%ypes of Retail Store locations

'igh(ay location

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!ree standing location )stand alone stores*

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Specialized Markets

+ -ppa Bal(ant Cho($ – Boo$s

. Budh(ar eth – /lectrical goods

0 Junna Ba1aar – 2ld goods

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Retail store/

Shopping centre

rimary area

Secondary area

%ertiary area

 - trade area is a geographic area from (here the store3 shopping

centre dra(s its maximum customers

Catchment 3 %rade area analysis

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Index of retail saturation (IRS)The Index of Retail Saturation (IRS) is a measure of the

potential sales per square foot of store space for a

given product line within a particular market area

Retail Location %heories

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Index of Retail Saturation (IRS)

where IRS index of retail saturation

! the nu"#er of households in the area

R$ a%erage retail expenditures for a particular product line per household or perperson in the area

R& retail facility (s'uare feet space) allocated to the product line

 

IRS (! R$)/R&

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Market Area A Market Area Market Area !

 Number of Customers (C) 4555 6555 7555

Retail Expenditures (RE) PerPerson (Rs)

+55 +.5 +55

Retail Facilities (RF) in SquareFeet

+555 +.55 +655

Index of Retail Saturation (IRS) Rs/square feet

Assume tat a retail operation needs sales of Rs !"# per square feet of sellin$

space for a $i%en product line to operate profitabl& 

455 655 48887

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'uff9s La(

: %he pro&a&ility that a consumer (ill patroni1ea gi#en shopping area or store depends on

:  distance or tra#el time from the shoppingarea or store

:   si1e of the shopping area or store: effect of tra%el ti"e on different kinds of

shopping trips

(effect of travel time on the type of productsto be purchased)

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'uff9s Model !ormula

 trip'soppin$ 

of (indontimetra%elof effecttereflectstatof exponentAn

center  

soppin$ point tostartin$scustomer)fromdistanceortime*ra%el

centersoppin$of Si+e 

centersoppin$ particular  

atotra%elin$ori$inof  point$i%enaatcustomeraof &Probabilit

,ere

ijT  b 

ijT  

 j j

  S 

 j

iij

 P  

n

1 j

b

ijT  jS 

bijT 

 jS 

ij P  

=

=

=

=

∑= ÷

÷=

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P ij   *+++ ,-

(*+++ ,-) . (++ -) . (*++ *-)

0ro#a#ility +12

+12 x *-3+++ students 345+ custo"ersAssu"e each custo"er spends a%erage Rs *+

345+ custo"ers x Rs*+ Rs 2513+++

: Repeat steps for the remaining areas and then add them to

estimate sales of entire geographic area

ro&a&ility that student (ill shop at Mar$et +

 -ssuming +.555 students

Mar$et +Mar$et .

Mar$et 0

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Reilly;s La( of Retail Gra#itation 

*-o cities attract retail trade from an intermediate cit&

or to-n in te %icinit& approximatel& in direct

 proportion to te populations of te t-o cities and inin%erse proportion to te square of te distances from

te t-o cities to te intermediate to-n'

A .

City - City B

0# miles

1# miles

Pop23######Pop20######

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*e matematical expression of Reill&4s &potesis is as

follo-s2

.'andAcit&to-n toteintermediatefromdistancete56

.'andAcit&of  populationte56

.'andAcit& b&attractedcit&

teintermediatefromtradeteof  proportionte6,ere

0

ba

ba

ba

a

b

b

a

b

a

 D D

 P  P 

 B B

 D

 D

 P 

 P 

 B

 B

−

   

  

    

  

 =

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An example of Reill&4s model2

A .

0# miles 1# miles

Pop23######Pop20######

30"'30#

1#

0######

3######00

=  

  

   

  

 =   

 

 

 

   

 

 

 =

a

b

b

a

b

a

 D

 D

 P 

 P 

 B

 B

*e percenta$e of te population of to-n 7x8

attracted to cit& A is "196 to cit& . is !:9'

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Brea$ing oint

In 3;!:6 te Curtis Publisin$ Compan& adopted Reill&4s formula

to calculate te breain$ point bet-een t-o cities' Suc a

 boundar& line represents te dominant tradin$ areas for cit& A

and .'

.'andA bet-eendistancete5

.'andAcit&of  populationte56

.'frommilesin.cit&andAcit& bet-een point brea(in$te,ere

3

ab

ba

b

b

a

abb

 D

 P  P 

 B

 P 

 P 

 D B

−

+=

A .

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Brea$ing oint )Cont*

An example of tis formulation2

A .

"# miles

Pop23######Pop20######

miles

 P 

 P 

 D B

b

a

ab

b 0