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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
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