Retail Site Location

Question 1

Metropolitan Statistical Area

Answer 1

A core urban area with 50,000 or more inhabitants

Question 2

Considerations in evaluating store locations

Answer 2

Economic (population and employment growth)
Competition
Strategic fit (right demographic and lifestyle fit)
Operating costs (proximity of area)
Number of stores in an area (economies of scale, cannibalisation)

Question 3

Economies of scale

Answer 3

Production goes up, cost per unit goes down

Question 4

Cannibalisation

Answer 4

A drop in sales and demand for a product with the company replaces it with a new one
- Marginal revenues must be greater than marginal costs

Question 5

Evaluating a site for locating a retail store

Answer 5

Site characteristics: traffic flow and accessibility, parking, visibility, adjacent tenants, restrictions and costs

Question 6

Cumulative attraction

Answer 6

Stores selling similar merchandise to similar target markets should be located in close proximity to increase the appeal of the location to customers