Store location and real estate markets are two most important areas of concern for a retailer by the virtue of the fact that real estate is the largest fixed investment for a retailer. For a retailer, being at the right place at the right time facilitates the development of sustainable competitive advantage. The decline in real estate prices in last 4-5 years has boosted the morale of the retailers. Because of this there has also been an increase in the supply of property for retail locations.
For every kind of a retailing format there is a series of tradeoffs to be evaluated, in terms of costs and value of site while selecting the location.
The location of the mall has become one of the decisive aspects of the retailing business. The location of the shopping mall spells its success or failure. A mall in a remote area would suffer from weak sales, poor cash flow and increased marketing and advertising expenses. Whereas, put the mall in a good location and the business will thrive with all the expectations of the retailer surpassed
The aim of this paper is to discuss in detail various aspects of real estate in the retailing industry with a specific objective of discussing all the aspects that are taken into consideration while selecting a location for shopping malls in India.
In order to prioritize the factors responsible for the selection of a location for a shopping mall, a small market survey will soon be carried out at Ahmedabad wherein the following shopping malls/retailers will be taken as the sample:
1. Fun Republic
3. Jade Blue
The paper would start with a brief introduction to the retail industry in India and the role/importance of real estate in it.
Following this would be a discussion on the state of Indian shopping malls.
In the series of topics to be covered, next would be a discussion on three forms of retail locations, i.e. High Street, the Destination Location and Convenience Location.
Next to it would be an overview of the retail property selection and property markets in India.
Following this would be a detailed discussion on the above-mentioned market research soon to be carried out at Ahmedabad for gauging the importance of major factors responsible for the selection of a location for a shopping mall.
The findings of the survey would form the discussion on current site selection trends in the Indian retailing industry.
The paper would end with a discussion on the future of the real estate requirements of the Indian retailing industry.
REAL ESTATE IN THE INDIAN RETAILING INDUSTRY
Retailing is all about being at the right place at the right time. Basically, it is all about three Ps - Property, Property and Property. While deciding on a business proposition, real estate issues are the most crucial ones by the virtue of the fact that real estate is the largest fixed investment for a retailer.
Location related decisions in retailing are said to be the most fundamental decisions because it facilitates getting the merchandise to the ultimate consumer at the right place, at the right time, in the right quantities, and at the right price.
Choosing the location is the most important decision made by a retailer for a number of reasons. First of all, location is one of the key considerations for the customer. For different requirements a customer's location preferences may differ.
Second, location decisions are strategically important for the retailer because they help in developing sustainable competitive advantage over the competitors that cannot be copied at any cost.
Traditionally most of the retail locations were located on the High Streets. High Streets have been the favorites of retailers because they provide easy accessibility to the consumers. But, the exorbitant prices of properties on the High Streets and lack of availability large space have...