Location decision making in retail firms: evolution and challenge

Abstract

PurposeThe paper has three objectives: first, to reflect on the contribution of this journal to the study of retail location assessment and decision making; second, to use the results of a questionnaire survey of retailers to assess the employment of location assessment techniques a decade since a similar survey conducted by Hernández and Bennison; third, in the light of these results, to conclude what likely challenges the location planning profession will face over the next decade.Design/methodology/approachEmploys an online questionnaire survey of retailers across a range of sizes and sub‐sectors.FindingsSpecialist location planning teams within retailers are found to be small with established forecasting processes firmly established for new or relocated stores – indicative of less activity focused on the management of the existing portfolio or the identification of outlets within the network for rationalisation. The vast majority of site assessment techniques increased in use over the decade, reflecting a greater reliance on data and analysis to inform decision making alongside the traditional use of experience and intuition. Complementing highly technical evaluation techniques, the site visit is widely recognised as informing modelling and subsequent decision making.Research limitations/implicationsThe survey sample is smaller and contains a greater proportion of larger businesses than that undertaken by Hernández and Bennison.Originality/valueThe paper underlines the changes in location planning sophistication a decade on from a landmark survey, suggests the implications of the observed changes and identifies likely developments in the profession.

Managing communities and managing knowledge: strategic decision making and store network investment within retail multinationals

“…First, we conducted an online survey of named location planning/property managers from 102 individual retailers which produced 43% usable responses. While this is not the focus of research for this paper and is reported elsewhere (Reynolds and Wood, 2010), it served to contextualise many of the issues and aided us in devising an interview protocol. Second, our main data collection employed semi-structured interviews with approximately 30 analysts and managers responsible for location planning across a range of retailers and related consultancies.…”

“…Despite this largely prescriptive literature, the small amount of research that has examined retailers' location planning in practice suggests that there is a wide variation in the use of analytical techniques and the subsequent decision-making processes (Hernández et al, 1998;Pioch and Byrom, 2004;Reynolds and Wood, 2010).…”

“…While it is true that there is an established geographical and management literature concerning retail location planning that has sought to promote increasingly complex models and techniques to provide objective assessments of market potential (Birkin et al, 2002), work from business management suggests that the degree to which these techniques and models are employed is, in reality, highly variable between retailers (Hernández and Bennison, 1998;Reynolds and Wood, 2010), Furthermore, the link between the deterministic outputs of the models and portfolio decision-making practice is far less straightforward than one may expect (Clarke and Mackaness 2001;Clarke et al, 2003a;Clarke et al, 2003b;Wood and Tasker, 2008;Wood and Reynolds, 2013).…”

Delineating retail conurbations: A rules-based algorithmic approach

“…Analogous data to the commuter matrices also now exist in the form of loyalty card data reflecting customer flows between place of residence and retail centres. Various surveys (Byrom et al, 2001;Hernandez and Bennison, 2000;Reynolds and Wood, 2010) have underlined how data-rich many location planning departments are, although rarely has this been used to its full potential to date. The popularity of loyalty cards makes them a valuable source for geographic and non-geographic consumer data (Dennis et al, 2001).…”

The UK food retail ‘race for space’ and market saturation: a contemporary review

“…However, the gravity of a store is also known to be affected by a range of issues such as store size, product offer and brand and differs slightly from understanding store choice in terms of "how consumers truly experience competition − as reflected in the choices they feel they have" (see Clarke et al, 2006, 23). Quantifying store gravity is an approach that underpins spatial interaction modelling and has been subsequently employed in location planning and site research departments across a wide range of food retailers and typically provides accurate forecasts if implemented appropriately (Birkin et al, 2010;Reynolds and Wood, 2010;Wood and Reynolds, 2012a) (see Table 2 that identifies variables affecting store performance). With greater competition that is characteristic of conditions approaching saturation, impacts from proximate stores (both owned and from competitors) are increasingly common.…”