Whether you run an independent business and are considering opening your first physical store, or have an already successful chain and are hoping to expand further, choosing the right location is pertinent to your store’s success. Here we will take a look at some of the many factors you need to consider, and offer guidance on how to make the decision.
When deciding on a city or town to open a shop, research into the demographic of the area is essential. This can be done using census data and local media outlets. Know and understand your target customer, then find out where they already live, work and shop.
It is also important to consider your budget at this stage, as the average retail rent price varies from city to city. As you might expect, London is the most expensive city in the UK to set up a shop, so consider whether basing your brand in the capital is worth the extra expenditure. In addition to rent, other expenses may increase when renting in a bigger city, including utilities, employee salaries, insurance, licences/permits, common area maintenance fees and taxes.
Depending on your brand and target customer base, a large city centre may not be the ideal place to set up shop. Local markets and smaller town centres offer the perfect location for independent and speciality brands. They usually have cheaper rent and expenses, whilst still seeing decent footfall. Furthermore, customers tend to be in less of a rush and have time to browse and engage with your brand.
Shopping centres and high streets
While shopping centres were once an alternative to high street shopping, typically located outside the city centre, most city centres now offer a mixture of high streets and shopping centres. However, there is still a distinction when deciding where to locate your retail store, as both have pros and cons.
High streets are the primary place for businesses to locate themselves in any city, town or village, and they generally have high everyday footfall due to being within walking distance from people’s homes and workplaces. Historical landmarks and attractions in the near vicinity may increase the number of visitors, allowing high street shopping to tap into the need for both convenience and experience simultaneously.
The downside is that high street rent tends to be on the expensive side, and the cost of maintenance and upkeep can be higher due to the buildings being older than modern retail spaces, such as shopping centre units.
Shopping centres are large buildings in which multiple businesses are located, connected by indoor walkways. Designed to create a shopping destination, rather than for convenience, shopping centre footfall tends to be highest at the weekends and lower during the week. The proximity of the biggest and most popular brands attracts shoppers, and with large carparks and lots of places to eat, they may travel from far and wide to spend a day at a shopping centre.
Nevertheless, shopping centres lack the ‘prestige’ of the high street, which may limit the success of smaller, independent businesses alongside the big names.
Retail parks are shopping areas that are located on the outskirts of most UK cities and towns, comprising mainly warehouse retail units of 5,000 square metres or larger. Deciding whether to open a store in a retail park generally depends on the goods being sold. For brands selling mainly larger items, such as furniture, or a larger quantity of items, the sizeable stock rooms of retail park units are essential to maintaining sales.
Free parking encourages customers to travel from afar to visit retail parks, and because their cars are parked nearby they are not limited by carrier bags. However, the downside to retail parks is that there is little space for smaller retailers and market stalls, due to the size of the units. They also lack the community feeling of the city centre, and most shoppers would prefer to spend a day out on the high street, usually opting for retail parks only when they have an explicit reason to visit one or more shops in particular.
The impact of your store’s neighbours on the suitability of your location cannot be ignored. Of course, the line-up of surrounding shops will change over time, but they can still be useful insights into your future success in that area. The idea of direct competition may cause concern, but it is not necessarily a negative. Particularly just after opening, competitors can be helpful in bringing your desired customers to the area.
Speciality shops should be careful that there is not too much direct competition from brands with a larger product range – shoppers interested in your speciality may decide to just visit the latter for convenience. Likewise, independent shops and boutiques should be wary of being undercut by larger brands selling the same products in the same area. Independent brands tend to thrive in each other’s company, sharing like-minded customers looking to reduce their spending with bigger corporations.
Fortunately, it is possible to test a retail location before committing to a long-term lease. Pop-up retail is gaining popularity and giving brands the opportunity to book temporary and flexible retail spaces. A pop-up shop may be open for a matter of weeks or months – or even a few hours. Opening a pop-up shop can provide insight into:
- Footfall in the area
- Whether or not your target customers shop in that area
- Interest in your brand over surrounding competitors
With the newest feature on completelyretail.co.uk, Completely Flexible, brands can register their interest in flexible retail spaces in their desired location, allowing landlords and agents to contact them with suitable opportunities when they become available. You can also use Flexible to search for all retail properties available for short-term licencing.