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Retail Store Location and Market Analysis: A Review of the Research
Abstract
Most research and writing in the area of retail store location and market analysis has been undertaken by marketing researchers and urban geographers. The purposes of this review are to present this eclectic area of study as a unified body of knowledge, to encourage real estate researchers to become more involved in this area, and to indicate where recent research in real estate and urban economics is an outgrowth of study in this area. The field can be viewed as a hierarchy of investigations, including modeling consumer behavior at the micro level, using models of consumer behavior in models of store location, and developing approaches for choosing among markets at the macro level. The hierarchy of investigations should in turn be viewed as the study of economic activity in space. Recent research in the areas of allocation of space in shopping centers and price discrimination in retail leasing is an outgrowth of work in the area of retail store location and market analysis.
... Additionally, considering the rapid increase in the number of retail stores and shopping malls, with nearly identical product and service offerings, slight differences in location can have a substantial effect on sales performance and profitability. Finally, the disadvantages or problems of an initially wrong decision in retail store location are extremely difficult to overcome as the location decision represents a long-term, fixed investment which is immobile and unique [37][38][39]. ...
... Given the importance of the issue, retail location decision has become the subject matter of different disciplines such as marketing, urban sciences, economics, geography, applied mathematics and geomarketing and different retail location theories, models and procedures have been proposed. In this sense, it is possible to say that retail location theory is comprised of four broad theoretical areas that are central place theory, spatial interaction theory, land value theory and the principle of minimum differentiation [38,[40][41][42][43][44][45]. ...
... In the framework of this theory, distance to the supply point and transportation costs are the most important factors. It is predicted that the longer distance from the supply point will reduce the demand for a good or a service since customers will choose the nearest retailer [38,42,[46][47][48]. Land value theory, which is also known as bid rent theory, stems from Alonso's seminal land use model and asserts that since the supply of land is fixed, the location of different activities will depend on competitive bidding for specific sites and, consequently, all urban sites are occupied by the activities that are capable of paying the highest rentals. ...
Multi-criteria decision-making (MCDM) techniques are increasingly being used for the problem of location selection, which directly affects the long-term success of a company. Besides these techniques, with the advantage of handling both spatial and non-spatial data, geographic information systems (GIS) also represent a useful method for selecting the appropriate location for different kinds of facilities and sites. In this respect, this study aims to compare the results of a MCDM technique, fuzzy technique for order preference by similarity to ideal solution (TOPSIS), and GIS for the location selection of shopping malls in Turkey. According to the results of both fuzzy TOPSIS and GIS, the Marmara region was determined as the best alternative for shopping malls in Turkey.
... Huff's model, which is often called the market probability model, posits that the attractiveness of a store to consumers is influenced by the scale of and distance to the commercial agglomeration area [21]. These findings significantly impacted future studies on the spatial patterns of the retail industry [22]. Subsequently, research began focusing on the spatial development and evolution of the retail industry, the differentiation of business types, and the identification of agglomeration hotspots. ...
The retail industry is a crucial element of the urban commercial framework, and its spatial configuration profoundly influences its urban planning, infrastructure development, resource allocation, and sustainable development. Based on the point of interest (POI) data for Ningbo’s retail industry in eastern China, this study used methodologies such as kernel density estimation, buffer analysis, and local spatial autocorrelation analysis to investigate the spatial distribution characteristics and influencing factors of Ningbo’s retail industry. The findings are as follows. First, the spatial distribution of Ningbo’s retail industry exhibits a “block aggregation and multi-center development” pattern. The overall trend is oriented from northwest to southeast. Second, various retail outlets generally cluster around two core zones and multiple island-like areas, which reflect the differences in hotspots due to varying characteristics. Third, the spatial distribution of retail stores is highly correlated with the physical geographical features, population distribution, major road networks, and residential zones. The research findings indicate that Ningbo currently faces issues such as an excessive concentration of specific retail formats and a lack of format diversity. Optimization strategies were proposed to sustainably develop the retail industry of Ningbo. This study provides valuable information to formulate sustainable development strategies for the retail industry in Ningbo and other small and medium cities.
... The diverse range of goods available means that shops are increasingly in competition with one another. Monroe and Guiltinan argue that the choice of where to make a retail purchase is conditioned by [Monroe, Guiltinan, 1975;Vandel, Cartera, 1993]: ...
Celem artykułu jest identyfikacja i ocena zachowań nabywczych srebrnych singli w odniesieniu do wyboru miejsca i częstotliwości realizacji zakupu wybranych produktów żywnościowych i nieżywnościowych. Badanie zostało przeprowadzone w dwóch etapach w latach 2018–2022. Wynika z niego, że samotnych seniorów można uznać za aktywnych konsumentów. Pozytywny bądź negatywny stosunek do robienia zakupów jest determinowany wiekiem, poziomem wykształcenia i zamożnością badanych seniorów. Zakupy sprawiają dużą lub bardzo dużą przyjemność osobom w wieku podeszłym, przeważnie kobietom mającym wykształcenie średnie lub wyższe, dysponującym miesięcznym rozporządzalnym dochodem powyżej 3500,00 zł. Przy zakupie produktów żywnościowych srebrni single dużą wagę przywiązują do ceny, jakości i promocji, natomiast są mniej wrażliwi na modę i chęć wyróżnienia się. Z kolei przy zakupie produktów rynkowych większą wagę przywiązują do jakości produktów aniżeli do ich ceny. Samotne osoby starsze zakupy produktów żywnościowych robią najczęściej na bazarach i targowiskach, w sklepach osiedlowych i dyskontach, natomiast zakupy produktów nieżywnościowych – w sklepach wielkopowierzchniowych oraz sklepach i salonach zlokalizowanych na terenie galerii handlowych.
... Furthermore, the level of development of the regional retail industry was generally determined by GDP. The higher the GDP, the greater the number and level of retailers (Vandell & Carter, 1994). ...
The Community-Group-Buying Points (CGBPs) flourished during COVID-19, safeguarding the daily lives of community residents in community lockdowns, and continuing to serve as a popular daily shopping channel in the Post-Epidemic Era with its advantages of low price, convenience and neighborhood trust. These CGBPs are allocated on location preferences however spatial distribution is not equal. Therefore, in this study, we used point of interest (POI) data of 2,433 CGBPs to analyze spatial distribution, operation mode and accessibility of CGBPs in Xi'an city, China as well as proposed the location optimization model. The results showed that the CGBPs were spatially distributed as clusters at α = 0.01 (Moran's I = 0.44). The CGBPs operation mode was divided into preparation, marketing, transportation, and self-pickup. Further CGBPs were mainly operating in the form of joint ventures, and the relying targets presented the characteristic of 'convenience store-based and multi-type coexistence'. Influenced by urban planning, land use, and cultural relics protection regulations, they showed an elliptic distribution pattern with a small oblateness, and the density showed a low-high-low circular distribution pattern from the Palace of Tang Dynasty outwards. Furthermore, the number of communities, population density, GDP, and housing type were important driving factors of the spatial pattern of CGBPs. Finally, to maximize attendance, it was suggested to add 248 new CGBPs, retain 394 existing CGBPs, and replace the remaining CGBPs with farmers' markets, mobile vendors, and supermarkets. The findings of this study would be beneficial to CGB companies in increasing the efficiency of self-pick-up facilities, to city planners in improving urban community-life cycle planning, and to policymakers in formulating relevant policies to balance the interests of stakeholders: CGB enterprises, residents, and vendors.
... Competition in commercial activities has a significant impact not just on the success of individual businesses, but also on urban structure and economy (Jung and Jang 2019;Vandell and Carter 1994). Within the tertiary industry, restaurants are one of the most common services, with an interesting tendency to open and close more frequently than other types of businesses. ...
Commercial activities within a city have competed to attract people, and the interactions between these activities have affected urban dynamics. Among many services, the restaurant business accounts for a significant portion of the urban economy, with spatiotemporal variations in survivability reflecting crucial signs of changes in urban structure. This study aims to identify the patterns of spatiotemporal changes in restaurants locations to deepen our understanding of urban dynamics. Studies have utilized a variety of data sources, including social media and consumer review services, but they cover relatively short periods and focus on currently operating businesses. Public open data, however, offers potential to reveal continuous changes in urban space at micro scales since it covers an entire population with individual historic records, making it complete rather than a sample. In this study, we explore newly released public open data on licenses of restaurants in Seoul, South Korea to identify spatiotemporal dynamics of commercial activities in the city using three exploratory analytics, including hot spot analysis, trends analysis of spatial clusters, and space-time scan statistics. The results show continuous temporal changes in spatial clusters of restaurants. Hot spots remain in three traditional cores of Seoul, although each cluster has shrunk over time. Moreover, suburbs have become more risky, with significant declines and more closures than expected as well as relatively shorter lifespans. This implies a concentration of restaurants in central areas, which can further economic disparities within a city. By portraying spatiotemporal changes in restaurant entrepreneurship with public open data, this study provides essential knowledge about urban dynamics informing individual and public decision making processes, particularly associated with locating new businesses.
... Retail store location can be considered as the most important determinant of the success or failure of a store (Vandell and Carter, 1993). Turhan et al. (2013) identified seven categories of criteria for choosing a store location. ...
The choice of locating a retail store in a given area is among the most important decisions that retailers have to make for the long term success of their business. A good location allows for easy access, attracts customers and increases sales. This paper proposes an ex-ante analysis by measuring retailers’ perceptions with respect to the inauguration of new metro stations. Main findings show that the increase of accessibility brought by new interventions in the transit system increases the attractiveness of the area for retailer’s shops location choice. The evaluation of the attitudes of prospective retailers represents original insights into the dynamics of transit networks and the economic viability of local retailers.
... Good access to the stores, together with visibility for the clients, are ways to break the point of just passing in front of the store or deciding to enter and purchasing something. It is at this point that people flow turns into profit for the retailers (Vandell & Carter, 1994). ...
This document presents a research on the extent to which transit-oriented development (TOD) characteristics play a role in the investment strategies of horeca (hotel, restaurant, and café (Eurostat, 2017)) businesses regarding areas surrounding a transportation hub. The research builds on two strands of literature. The first includes the body of knowledge on locational strategies of businesses. The second is the body of knowledge on the design concept of TOD and its characteristics. The connection of the theory is made to understand which TOD characteristics are relevant for private businesses in making their investments decisions in station areas. The motivation for the study is to assess whether public improvements in station areas, specifically focusing on TOD characteristics of a station area can stimulate horeca businesses to invest in these areas. The research has an explorative character, using the hubs as the focal point between land use and the transportation system. The methodology consists of interviews with the representatives of selected horeca businesses in order to understand their investment strategies and more specifically, their willingness to invest in areas where TOD characteristics are present in a greater extent. This methodology led to a deeper understanding of the potential local economic benefits, enhancing TOD characteristics in a hub area. Some TOD characteristics were found in similar businesses divided into two subdivisions: ‘hotel’ and ‘restaurant and cafe’. For the first one, the lifestyle of the surrounding is playing an essential role in the locational decision-making process. In the second subdivision, the flow of people was highlighted as a crucial feature to perform an attractive factor for investments. Nonetheless, the combination of all presented characteristics incentivizes businesses’ strategies to some extent.
In today's digital landscape, users face the inconvenience of visiting multiple platforms to hunt for the best prices on Apple devices. However, "AppleGo" aims to be the solution to this problem. This innovative platform consolidates listings of nearby shops on a single platform, enabling users to effortlessly compare and discover the most favorable prices for their desired devices. "AppleGo" is a groundbreaking online platform designed to revolutionize the way users find Apple devices from nearby shops. It eliminates the need for physically searching multiple stores by offering a comprehensive list of available devices, complete with the best discounts. Users can conveniently identify the ideal option without the hassle of in-person visits. This platform also empowers local Apple shop owners, facilitating easy registration and the showcasing of services and packages to potential customers. By enhancing visibility and expanding their customer reach, "AppleGo" aids shop owners in growing their businesses. In essence, the platform bridges the gap between users and shop owners, creating a win-win solution that saves time and effort for users and boosts business prospects for local shops.
Waves of urbanization have always played a significant role in reshaping the morphology of cities and altering livelihood patterns. Changes in street intersections and block configurations lead to modifications in how cities function, how people experience space, and how residents earn a living. However, these structural changes—mainly when triggered by rapid development pressure—often exacerbate existing vulnerabilities and generate unresolved spatial tensions between pre-existing neighborhood features and new forms of development. Given the urbanization rate experienced by China in the last three decades, this research explores these spatial tensions in Shanghai with a specific focus on the shifts in type and spatial distribution of commercial units throughout the development of Hongkou district. This project employs two novel datasets: the 1937 map of business licenses and the 2018 crowdsourced Points of Interest (POI) data from “Gaode Maps.” Through a comparative analysis of these datasets, the research engages with the recent attempt of the city of Shanghai to repurpose the outdated commercial typologies built in the early 1990s during the government-led urban renewal. More specifically, this study portrays the morphological transitions of Hongkou district through the lens of commercial activities and sheds light on the relationship between people’s livelihoods, street commerce, and urban form.KeywordsUrban morphologyCommerceSpatial analysisApplied GISHongkou districtShanghai
Determinants of retail patronage were identified and compared in a series of analyses of covariance of multinomial logit parameters. These parameters, estimated from random samples drawn from six North American and European markets over a seven-year period, revealed insignificant seasonal changes in a single market, significant changes in a single market over the seven years, and significant differences between markets and across cultures.
The authors suggest that there is more than one type of outshopper, each type motivated by needs emanating from unique socioeconomic, life cycle, and life style perspectives. These concepts are tested with an empirical classification of outshoppers. The relationships revealed have important implications for marketers in the process of (1) developing local retail facilities and appeals to reduce loss of customers to other trade areas and (2) designing retail programs to attract consumers from contiguous trade areas.
Logical consistency of market share models has received considerable attention in the recent marketing literature. The reports suggest that, at least theoretically, attraction-type specifications are more easily justified than the ones commonly used in empirical work. The authors examine whether the theoretical superiority also implies a better predictive performance. The empirical results give a tentatively affirmative answer.
The author explores possible specification biases of conventional retail patronage models stemming from important omitted variables and from the composition of the set of alternative retail centers. The inclusion of characteristics of retail centers and of transportation modes is attempted in a systematic manner. The models are tested on a set of planned suburban shopping centers and traditional, unplanned downtown centers. Strong empirical evidence is reported which suggests that consumers consider a combination of retail center and transportation mode characteristics in their decisions to patronize alternative retail centers.
There are at least three sampling issues that can result in misleading trade area maps if not recognized. This paper discusses these issues, shows their effects on the trade area map of a large shopping center, and suggests procedures for responding to them.
The rise in vertical marketing systems (VMS) has had a profound impact on the nature of retail competition. The increase in intrasystem competition between outlets of the same VMS points to the need for increased sophistication in market area analysis models to aid in strategy development. This article develops a set of models to address critical managerial issues concerning retail locational strategy in an intrabrand competitive setting. Findings demonstrate the need to evaluate outlet-specific determinants of patronage behavior, in addition to those of a generic nature, in analyzing intrabrand competition.
Can retail chain image measures be added to the Huff probabilistic model to improve predictions of retail trade?
To design successful strategies retailers must take into account not only the marketing environment confronting them today but also anticipate possible competitive and demographic changes. This article presents a procedure to help retailers formulate a strategic location plan in a dynamic environment. The procedure involves a model for assessing site desirability, a criterion for selecting among alternative sites, and a heuristic to facilitate the computational procedure. A key element is the use of competitive equilibrium concepts to provide desirable strategies under a variety of future scenarios.
One of the critical problems in the attempt to construct central-place models in terms of the location-allocation problem is to optimize the overall system by combining retailer and consumer behaviours; and this problem is solved by use of a two-level control system. In this system, suboptimization problems are individually solved and consumer behaviour is controlled at the community level, and the location of central facilities is determined at the city level to maximize demand within the city. This model is applied to a city consisting of twelve communities, and the optimum location pattern of central facilities for three orders of functions are determined.