Homework Answers
I have selected two retail outlets as :
Spar Hypermarket
Royal Mart
Spar Hypermarket has a very good location in terms of customer attraction of shopping district. It is located in a shopping mall where the customer walk-in is very high. Its location is also perfect in terms of adequate parking space and other facilities which are required by the customers. The purchasing power of the population in the area is also good. The competition is not very high in the area and the stores adjacent to the Hypermarket offers complementary products , being located in a mall and thus it offers one stop shopping destination for the customers. It is easily accessible through public and private transport as the road is wide.
Royal Mart has a poor geographic location as it is not accessible by the public transport and as the road is very narrow, people cannot take their cars. Customer walk -in is low being a stand alone store. There is no parking facility available for the customers.The purchasing power of the population is also low in the area. There is no adjacent store located and thus customers need to go specially to Royal Mart for shopping.
Location has got a big impact on the store traffic.It affects the outlet in the below mentioned ways :
- Affects the customer volume : Customer volume would be huge in a premium location.
- Affects the transportation cost : If the site is not accessible , the transporattion cost is high.
- Affects the human resource cost in terms of salaries given to the staff : Premium location commands high salaries given to the staff
- Affects the investment capital : Site in a premium location is high-priced
- Affects the volume of business: If a store is in premium location, there would be more business coming up because of huge crowd.
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