Why is Store Location Important in Retailing?

Store location is an important decision for a retailer due to following reasons:

First, location is typically the prime consideration in customer’s store choice decision. For instance, when choosing where you’re going to have your car washed, you usually pick the location closest to your home or work. Most consumers similarly shop at the supermarket closest to them.

Second, location decisions have strategic importance because they can be used to develop a sustainable competitive advantage. If a retailer has the best location, that is, the location that is most attractive to its customers, competitors can’t easily copy this advantage and are relegated to occupying the second best location.

In addition, many Western European countries restrict retailing to specific areas and then restrict the sizes of the stores that can be built.


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