Is position important?

Lease, contract, keys, propertyHow many times have you heard the age old cliché that the three most important things in retail are position, position, and position?

This refers to where your store is located and includes the broader picture such as a shopping centre versus a shopping strip, as opposed to the narrower picture which is the position within the mall or on the street.

Shopping centre management are skilled at the art of selling store locations to new and existing tenants. Their intentions are usually well founded, but on occasion they will sell a location to suit their own needs. It would be naive to think otherwise and it is up to the store owners or management to beware.

What is really important is not so much position, but traffic and the type of traffic. You can have a lot of traffic, but if it’s not the right traffic you are going to be disappointed.

A couple of real live cases.  A store became available for a chain selling small leather goods. The store was located in a shopping area at a busy train station. The result was a failure. The traffic was plentiful but the wrong type.

A retailer had a fairly successful smallish store in a shopping centre. It sold home furnishings which are quite bulky and they that a larger store would enable it to carry a bigger range. Shopping centre management had just the thing. A larger store quite near the food court. Again the sentiment was that more traffic is good and the store was subsequently moved. It had a new fit out and the store looked tremendous. But the sales were simply not there to sustain the upmarket store. The traffic was wrong.

As a result of this and although it went against the grain, the owner recently agreed to trading down. We dropped the margin by a whopping 10 per cent to 15 per cent. Sales went through the roof and GP$ was above budget.

Before anyone comments – yes, I appreciate that position impacts significantly on traffic and the kind of traffic. What I am suggesting is that it is important to study the traffic at a particular location before signing the lease. If that means sitting outside the store and watching the passing parade for a day or two, so be it. It could be time well spent.

Stuart Bennie is a retail consultant at Impact Retailing and can be contacted at or 0414 631 702.




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