The top 5 considerations for a great retail location

Contrary to public opinion, rent is not one of the top 5 considerations when evaluating a property or a space for your retail business. True, it is an important factor but without consideration given to the 5 items below, even a rent-free location could be a losing proposition.

1. Location: The old adage, Location, Location, Location is still true but retailers today must take this one step further. A great location means different things to different retailers. For instance, a great location for a restaurant that serves only lunch and dinner may be a poor location for a coffee/espresso retailer. A great location for a high-end jewelry store may be a poor location for a check cashing / payday loan retailer. In order to determine the best location for a particular retail business one must look beyond the general notion that a strong site is universal and consider what makes it such.

2. Demographics: A strong retail location will encompass a trade area that has a dense population of your core customer base. This can be daytime population (businesses & employees), residential population (commonly known as rooftops) or both. A strong location is one that is visible (regularly) to the types of customer that you want to attract. For example, a location that is close to a residential population that has many young working families may be a good location in which to consider opening a day care business. A daytime population that has a lot of white collar employment in a ½ mile radius may be a good location in which to open a casual restaurant that specializes in lunch and dinner. The “right” demographics are different for every retailer.

3. Ingress & Egress: A strong retail location MUST have easy access from the major streets servicing the property. In the retail world you don’t want to have what is known in the industry as a “Statue of Liberty” location, meaning one that is extremely visible but next to impossible to access. We all know that consumers are lazy. If given the choice a customer will favor one retailer over another (goods & service being relatively equal) simply because it is easier to drive in and out of the property’s parking lot. This is a fact and you can see its effect on retailers all over your city if you look hard enough. Make certain that the location you choose has good access.

4. Signage: A visible sign is very important to all retailers. If your customer can’t see your business how can they shop there? A well located, visible sign that identifies your business is critical to your success. On the flip side, many retailers think that monument or pylon signs are a necessity. This is only partly true. If you are an “anchor-tenant” and are able to erect a sign that is large enough to see from at least 1-2 blocks away, a monument or pylon sign will be helpful. Otherwise, traffic moves at such speed and there are so many visual displays competing for the motorist’s attention that a minor position on a multi-tenant sign will do little to draw traffic into your business. You are better off taking the time to evaluate the type, size and visibility afforded your storefront sign and base your signage decision from this perspective.

5. Parking: Depending on the type of retail business and the type of location you are seeking (urban vs. suburban), parking will be part of your decision making process. This includes off-street parking (parking lots), on-street parking, fee-based parking (garages or metered) and the number of available spaces easily accessible to your business. If you locate next to a restaurant be prepared to see spaces in front of your business used for their overflow parking at peak times. If you are located next to a doctor’s office or health club, be aware that their customers will park for a minimum of 30 minutes. All of these factors can and will affect your customer’s ability to park close to your business.

There are many factors to consider when searching for the right location for your retail business. The 5 mentioned in this article must be at the top of your list and be carefully reviewed before signing a lease or buying a property. A commercial real estate broker that specializes in retail brokerage should have the resources to help you wade through these and other considerations you will face when choosing the right location for your business.

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