Chapter 7

Retail Locations

McGraw-Hill/Irwin
PPT
7-1
Levy/Weitz: Retailing Management, 5/e

Copyright 2004 by The McGraw-Hill Companies, Inc. All rights

Retail Locations
Shopping Centers
Strip Shopping Centers
Shopping Malls
City or Town Locations
Inner City
Main Street
Free Standing Sites
Other Location Opportunities
PPT 7-2

____ _________ Mall

(_______, ______ 5.2 million sq. ft.)

PPT 7-3

Tradeoff Between Locations

There are relative advantages
and disadvantages to consider
with each location.

Locating in a mall:
Source of entertainment/recreation
Protection against weather
Security

PPT 7-4

Other Retail Location Opportunities

Mixed Use Developments

Airports
Resorts
Hospitals
Store within a Store

PPT 7-5

Matching Location to Retail Strategy

Department Stores
Specialty Apparel
Category Specialists
Grocery Stores
Drug Stores

PPT 7-6

Types of Leases
Percentage
vs.
Fixed - Rate
Percentage leases lease based on a __ of sales.
Retailers also typically pay a ___________ ___ based on a
percentage of their square footage of leased space.

Most malls use some form of percentage lease.

PPT 7-7

Variations of Percentage Leases

Percentage lease with specified maximum percentage of sales up to a maximum amount.

Percentage lease with specified minimum retailer must pay a minimum rent no matter how
low sales are.

Sliding scale - percentage of sales as rent

decreases as sales go up.

PPT 7-8

Fixed Rate Leases

Fixed Rate Leases - used by community and
neighborhood centers.
- Retailer pays a fixed amount per month over the life of
the lease.

Graduated Lease - a variation of the fixed rate

lease
- Rent increases by a fixed amount over a specified
period of time.
PPT 7-9

__________ ___ Clause

Limits the landlord from leasing to certain tenants.
Some tenants take up parking spaces and dont
bring in shoppers: bowling alley, skating rink,
meeting hall, dentist, or real estate office.
Some tenants could harm the shopping centers
wholesome image: bars, pool halls, game parlors,
off-track betting establishments, massage parlors
and pornography retailers.
PPT 7-10

Terms of Lease
_________ ___ Clause
Prohibits the landlord from leasing to retailers
selling competing merchandise

______ Clause
Allows the retailer to terminate its lease if sales dont
reach a certain level after a specified number of
years, or if a specific co-tenant in the center
terminates its lease.
PPT 7-11

Other Legal Issues

Zoning and Building Codes
Zoning determines how a particular site can be
used.
Building codes determine the type of building,
signs, size, type of parking lot, etc. that can be used

Signs
Restrictions on the use of signs can also impact a
particular sites desirability

Licensing Requirements
Some areas may restrict or require a license for
alcoholic beverages
PPT 7-12