Acquiring an Optimal Retail Chain Location in China

Retail chains in China have been booming in the past 5 years, particularly for small 100 ft2 stores. This study focus on evaluating the location of small chain stores, including 5 major concerns regarding site selection: (a) stream of people, (b) group of stores, (c) location characteristics, (d) store space, and (e) rent proportional to sales. We divided these categories into 9 major factors for store evaluation: (a) area residents, (b) crowd flow rate in front of a store, (c) target customer number within a 1, 500 m radius, (d) complementary stores within 30 m, (e) exclusive stores within 20 m, (f) suitable location, (g) unsuitable location, (h) usable store space, and (i) ratio between rent and sales amount. This research tests our evaluation model using the multifactor line regression method. The proven approach provides the retailer with a fast and reliable store site-selection method to acquire a profitable new store.