Choosing a Suitable Location for your Retail Store


Choosing a suitable location for your retail store is not an easy task. Indeed, making the wrong choice can be devastating for your business. “There is no ‘right or wrong’ answer when it comes to picking the perfect location. It actually depends upon the type of business you operate and what kinds of consumers you’re looking to attract” according to Portland Community College.

However, there are certain retail principles that apply when a location needs to be chosen.

Principles 1 that apply when choosing a suitable location for your retail store

  1. Adequacy of present market area potential. In other words, how many potential customers are in the market area and what are their purchasing power. Also, will they buy your products?
  2. Customer accessibility. A suitable location for your retail store should have access that is convenient for target market customers. Many products such as snack foods and gasoline are convenience goods, requiring a location close to target customers.
  3. Growth potential. The location must be in an area with a growing population and income rate.
  4. Business interception. A location must be chosen to intercept consumers when they are heading to their traditional retailers. A small retail store near a big department store may guarantee constant human traffic.
  5. Minimising the competition hazard. Current and potential future competitors must be identified and considered. If needed, a location must be considered away from competitors and in a location where competitors cannot intercept customers.
  6. Site economics. An analysis of the available services and characteristics of the site, such as size, shape, ability to carry large and heavy building structures, must be considered.


Where you choose to locate your retail business will have a major impact on everything your shop does. Therefore, the difference between selecting the wrong location and the right site could be the difference between business failure and success.

Remember, you need a well researched and written Business Plan to get your business off to a good start!

Read also: Deciding on the Form of Ownership for your New Business


1 University of South Africa, 2009. Practical Merchandising, Only study guide for CRMM02-X, Centre of Business Management, UNISA, Pretoria.



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