Question

Sub Hub-Retail Site Selection Read the overview below and complete the activities that follow. Sub Hub is a quick service submarine sandwich shop, with current operations in five states. Sub Hub operates franchise locations only. The company has announced their expansion plans for the next few years with a mix of new company owned and franchised stores in new markets. Sub Hub prides itself on the quality of its product, freshly made sandwiches and fast and friendly service. A normal Sub Hub customer is one that is looking for a "Healthy Choice" meal. Its primary target market is the working lunch crowd. Sub Hub's secondary market is consumers from residential areas near the location. Sub Hub is looking for a location that can best meet the needs of its target consumers. CONCEPT REVIEW: Selecting a site location is one of the most important decisions that a retailer can make. Because of the long-term implications of site selection, retailers invest a lot of resources in location decisions. Retailers consider numerous factors in site selection, including economic conditions, competition, strategic fit and operating costs. Retailers are also concerned with the number of stores in an area and the surrounding competition. Retailers also evaluate specific sites and estimate expected sales for a particular site location.

Sub Hub-Retail Site Selection

Read the case below and answer the questions that follow.

Sub Hub is a quick service submarine sandwich shop, with current operations in five states. Sub Hub operates franchise locations only. The company has announced their expansion for the next few years will be a mix of new company owned and franchised stores in new markets. Sub Hub prides itself on the quality of its product, freshly made sandwiches and quality service.

Currently, there are approximately 8 million restaurants in the world. A sub-sector of the restaurant industry, the Fast-Food & Quick-Service Restaurants (QSR), is comprised of companies that own, operate, and franchise eating places that provide a casual dining experience in a compressed time frame. The QSR segment adds value to customers by offering a convenient location and quick delivery. Sub Hub understands that in order to provide convenience it must locate restaurants near where its target market lives, works, and shops. Due to rising construction and real estate costs, expansion is becoming more expensive and is forcing many companies, like Sub Hub, to look for non-traditional locations and smaller store formats in order to grow. Sub Hub believes that it has a valuable product offering and wants to continue to expand, but is concerned about choosing the perfect site.

A normal Sub Hub customer is looking for a "Healthy Choice" meal, usually for lunch This target market includes customers between the ages of 35-55 that work full-time jobs, and have a combined household income of $75,000 to $100,000. Although, Sub Hub's prices are competitive with other sandwich shops, it is still at the higher end of the price range for QSR restaurants. Sub Hub is targeting customers with a healthier lifestyle who, while dependent on convenience, also favor quality and healthier options. This customer seeks the assurance that he/she will be served a quality product without the time commitment required by full service restaurants.

Sub Hub's secondary market consists of consumers from the residential areas surrounding the location. Their secondary target market focuses on families with small children between the ages of 2-10, with a combined household income of $75,000 to $100,000, who are looking for quick to-go options.

One of the proposed new locations for Sub Hub is located in a power center off a secondary highway in a large metropolitan area. The location is easily accessible directly off a secondary highway. In addition, exits from two major interstates are just a few miles away. The average traffic count past the location exceeds 8,000 vehicles every day in each direction. The power center hosts a Super Target, Staples, World Market, and Best Buy. The only other restaurant in this center is a noodle shop that offers sit down service, rather than counter-order service.

A trade area analysis indicates that within a 1.5-mile radius of this store, there are 8,700 professional service jobs and over 4,000 part-time and hourly wage jobs. Further trade area analysis also reveals that in the zip code of the site, 43 percent of the population consist of families with children under 18 years old. The trade area data (based from Census Data and information from the Site to do Business Index) indicates that 52 percent of the population in the zip code, said that they had visited a QSR sandwich shop in the past 6 months.

Because this location is off the major secondary highway, customers pass the center on their way to and from work. The center is located on the west bound side of the highway. Customers traveling home from the downtown area to their residences will take the west bound highway, making this location convenient for exiting. The main problem with this location is that while the power center is visible form the road, the Sub Hub location is not. There is a portion of the strip center with its back facing the highway and the Sub Hub location will be in that section. Sub Hub hopes that they can get their sign on the front of the shopping center that faces the interstate, but they know that it will be below the other anchor stores in the center. They are also developing a strong promotional and grand opening campaign to build awareness and overcome poor visibility.

1.

One of Sub Hub's main concerns with their locations is poor ____________ because traffic cannot see the restaurant from the street.

select

2.

One of the benefits of Sub Hub's site location is that there is little ___________________ because there is only one other restaurant in the center.

select

3.

Sub Hub examined information on the __________________ to determine whether or not the power center location was convenient for Sub Hub's target market, including the proximity of office building and residential areas.

select

4.

Sub Hub was interested in determining how many vehicles drove past the new location daily. The number of cars that pass by the site every day is also known as _______________.

select

QUESTION PROGRESS Case Analysis Case Analysis traditional locations and smaller store formats in order to grow Sub Hub believes that it has a valuable product offering and wants to continue to expand, but is concerned about choosing the perfect site select Sub Hub was interested in determining how many vehicles drove past the new location daily. The number of cars that pass by the site every day is also known as 4 A normal Sub Hub customer is looking for a "Healthy Choice" meal, Usually for lunch This target markef includes customers between the ages of 35-55 that work full-time jobs, and have a combined household income of S75,000 to $100,000. Although, Sub Hub's prices are competitive with other sandwich shops, it is still at the higher end of the price range for QSR restaurants. Sub Hub is targeting customers with a healthier lifestyle who, while dependent on convenience, also favor quality and healthier options. This customer seeks the assurance that he/she will be served a quality product without the time commitment required by full service restaurants select select accessibility barriers to entry--- originality traffic flow visibility Sub Hub's secondary market consists of consumers from the residential areas surrounding the location. Their secondary target market focuses on families with small children between the ages of 2-10, with a combined household income of $75,000 to $100,000, who are looking for quick to-go options. One of the proposed new locations for Sub Hub is located in a power center off a secondary highway in a large metropolitarn area. The location is easily accessible directly off a secondary highway. In addition, exits from two major interstates are just a few miles away. The average traffic count past the location

Answer 1

1. visibility

Reason: The main problem with this location is that while the power center is visible form the road, the Sub Hub location is not.

2. competition

Reason: The only other restaurant in this center is a noodle shop that offers sit down service, rather than counter-order service.

3. trade area

Reason: A trade area analysis indicates that within a 1.5-mile radius of this store, there are 8,700 professional service jobs and over 4,000 part-time and hourly wage jobs. Further trade area analysis also reveals that in the zip code of the site, 43 percent of the population consist of families with children under 18 years old. The trade area data (based from Census Data and information from the Site to do Business Index) indicates that 52 percent of the population in the zip code, said that they had visited a QSR sandwich shop in the past 6 months.

4. traffic flow

Reason: The average traffic count past the location exceeds 8,000 vehicles every day in each direction.