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Probably at no time in the history of the United States have so many men and women been interested in starting a store as at the present time. Although the number of stores has declined somewhat during the war, retailing is still one of the largest fields of business endeavor in the United States and one in which competition is severe. Retail establishments are extremely subject to failure, particularly during the first year of operation.

Retailers and others have long recognized that being located at the right place is important in determining the success of a store. Although skillful retailers have succeeded in poor locations their sales would have been larger and their profits greater if the location had been more suitable,

This manual, based on a survey of location practices of successful retailers, is designed to assist new retailers in making proper choice of a location. Intelligent selection of locations and better adaptation of retail enterprises to their geographic and economic surroundings should contribute to reduced retail mortality and lower distribution costs.

The study was prepared under the supervision of E. R. Hawkins.

ALBERT J. BROWNING, Director,

Office of Domestic Commerce.

AUGUST 1946.

Tables

1. Occupancy Expenses of Large and Small Retailers by Size of City-33 Trades, 1939.

2. Distribution of Retail Business and Operating-Expense Ratios in Central
Shopping District and Rest of City, by Trade Groups: St. Louis, 1929...
3. Average Yearly Money Expense for Main Categories of Family Spending...
4. Classification of the Traffic and Trade Characteristics of Retail Store
Locations.

5. Points to Consider in Selecting a Location for 18 Types of Restaurants..
6. Distribution of Food Group Stores, and Operating-Expense Ratios in
Central Shopping District and Rest of City: St. Louis, 1929.
7. Distribution of General Merchandise Group Stores, and Operating-Expense
Ratios in Central Shopping District and Rest of City: St. Louis, 1929..
8. Distribution of Automotive Group Stores, and Operating-Expense Ratios
in Central Shopping District and Rest of City: St. Louis, 1929 . . . . .
9. Distribution of Apparel Group Stores, and Operating-Expense Ratios in
Central Shopping District and Rest of City: St. Louis, 1929.

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10. Distribution of Furniture and Household Group Stores, and OperatingExpense Ratios in Central Shopping District and Rest of City: St. Louis, 1929.

11. Distribution of Restaurants, Cafeterias, and Eating Places, and OperatingExpense Ratios in Central Shopping District and Rest of City: St. Louis, 1929.

12. Distribution of Lumber and Building Group Stores, and Operating-Expense Ratios in Central Shopping District and Rest of City: St. Louis, 1929.. 13. Distribution of "Other Retail Stores" Group and Second-Hand Stores, and Operating-Expense Ratios in Central Shopping District and Rest of City: St. Louis, 1929.

56-57

58

59

60-62

Introduction

The location of a retail store plays a vital part in its success. Regardless of the size of the store or the kinds of merchandise offered for sale, the location must be suitable or sales volume will suffer, profits will be restricted, and failure may be the ultimate result. Although good locations frequently offset deficiencies in retailing, poor locations seriously handicap the most skillful merchandisers.

Studies which have been made of retail store failures reveal that a poor location is often associated with failure. In a study made in Massachusetts it was found that 28 percent of the retail stores which failed had poor locations.1 A National Drug Store Survey revealed that, of those stores which failed in St. Louis in 1932, the majority did not have good locations and one-third had chosen sites where drug stores had previously failed.2

The problem of a good location is as vital a one to the man who is already in business as to the prospective retailer. Because population centers do not remain constant and the value of a site fluctuates, the problem of choosing a good location is a continuing one. A market area is a dynamic thing, constantly adjusting to the economic and social forces which determine its pattern. Therefore, the retailer must be alert to trends and anticipate significant shifts in the shopping centers. A good location of today may, in a few years, become a poor one.

Scope of Study

This survey clearly shows that the large companies attempt a thorough study of locations. Considerably more attention is given today to the possibilities of mass selling. Also, certain companies have very definite site specifications and to that extent have simplified their site-selection problem. Almost all the companies believe, however, that a great deal of research is needed before site selection can be an exact science. At the present time decisions are based on a combination of statistical analysis and the experience of site-selection experts.

1 "Causes of Commercial Bankruptcies"--Victor Sadd and Robert T. Williams; Domestic Commerce Series No. 69, U. S. Department of Commerce, 1932.

2 "Causes of Failure Among Drug Stores"--Victor Sadd and Robert T. Williams, Domestic Commerce Series No. 59, U. S. Department of Commerce, 1932.

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