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How to choose the right location for the store?

The choice of location has a major impact on the financial success of the store.  The difference between selecting the wrong and right  location could be the difference between business failure and success.

Before choosing a location, it’s worth to answer a few fundamental questions:

– what type of goods will we sell?
– who our customers are?
– what area of ​​the store we need, how much space should be dedicated to the store and how much to the office?

Answering these questions is  the first step to find the location that will generate the maximum amount of profit for our retail store.

Type of store

Are we planning to open a convenience store, a specialty shop or shopping store which sells items at a higher price which are bought infrequently by the customer (eg cars or furniture). When buying furniture, customers will go to the area of ​​the city where there are several competitive stores with such an assortment. Thanks to this, they will be able to browse the offers of various vendors in one place without losing time for driving through the city. Therefore, neighboring with competitors may sometimes be a good opportunity for retailers to increase profits.

Furniture stores, due to their size, will be located most often on the outskirts of the city. However, there are products for which the prestigious location in the center is more natural. For example, if we sell jewelry, we should think about the location in the center in the first place.

How many potential customers do we have and who are they?

It is worth to research the area in which our store will operate, talk to the owners of other businesses from the region. We also recommend  to obtain important data from statistical yearbooks like the number of inhabitants in a given area, their average age and income. For example, when it comes to convenience stores in the housing estates in large cities, it is assumed that a very good location is one where 2,500 people live within a kilometer from the store. It is assumed that the store will be visited approximately by 40 percent of local residents, which, with 2,500 people, gives 1,000 customers. In a case of well-stocked local convenience store, each of them will statistically visit it two or even three times a week. The number of potential customers will be important in the case of a store with everyday items. However, in the case of specialty shop, it will be more important if potential clients correspond to our target group.


The availability of a parking space is one of the key issues taken into account by the store owner. Nobody likes to shop in a place where he has to hunt for a free parking space. When looking for a perfect location of a store in a big city, it is also worth thinking about the proximity of public transport stops.

Competition and neighbors

A specific neighborhood can help or harm our store. For example, an exclusive boutique will not work in the vicinity of a discount clothing store. But if there is a hair or beauty salon next to the boutique, the store owner can expect double profits. It is worth paying attention if there are stores offering complementary products near the premises you want to rent. It’s good to have a store next to stores operating in similar industries, because thanks to this the customer will be able to buy products he needs in one place.

Choosing the location of the store is not a good reason to be in a hurry. It’s worth to carry out thorough research, learn the area where our store will be located. If it will require a postponement of the store opening date, it is worth taking such a decision. It is better to spend more time looking for a very good location than just settling for the first place that comes along.  A bad choice can decide about the failure of the entire retail business.

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