Say, which is the single most important thing for an international or national retail chain when it comes to selecting a store?
MUMBAI: Say, which is the single most important thing for an international or national retail chain when it comes to selecting a store — the category of products sold by a company, the cost of real estate, or the location? The location, retailers would have us believe, notwithstanding surging real estate prices.
Most international franchisers leave the job of selecting a store site to the master franchisee. For example, My DollarStore, the US based retail store that offers single price discount merchandise.
“I am never involved in any of the store site selection procedure. For my company, it is always done by the master franchisee,” said Rex Mehta, CEO, DollarStore Corp.
Tim Eynon, director, of Provogue India, said, “The five essential things that go into selecting a site are cost, the neighbours, the size, the look of the store, the direction in which the town is going — in other words, the future, and the catchments.”
“The deeper methodologies differ from category to category. For example, an apparel store will have a different science of choosing a site from a food store or an electronics store,” Eynon added.
Retailers say it is extremely challenging to identify a store location for a luxury brand in India.
Bela Gupta, CEO, retail division, Kewalkiran Clothing Ltd, said: “Based on market population, value and potential, we identify store locations.
The propensity to spend also matters. Any town with over five lakh population is good enough for us. So, through this process, we have short-listed about 120 towns.
For locations within the city, our primary criterion is that the spot should be super plush, cause we are a high street store. If it is a mall, then the store location should be where traffic is high.”
“Multi-brand stores, which are not focused and getting out of business, are converting into various brand stores. So, we have an opportunity of collaborating with them,” Gupta added.
Ajay Kaul, CEO, Dominos, said, “There are various tiers within our company, which come into play as and when we start the site selection process.
So, the basic scouting for sites can be as scientific as putting ads in the newspaper and going through brokers, or as unscientific as stopping your car and spotting a site.
But before that, there is area selection. The challenge comes when we select a location and discover that there is already one store present there.
In that case, the primary mandate is to ensure that the new store should not eat up the business of the existing one. Our analysis has been really accurate over the years and our same store growth rate is about 25%.”
Kishore Biyani, CEO, Future Group though does not believe in numbers when it comes to selecting a store site. For him, societal study plays a more important role.
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