After a new store opens, sales and profit budget responsibilities of the store would be taken by Store Operations team. It is vital for Store Development team and Store Operations team to discuss deeply, build trust and form consensus about various issues of the candidate site in order for the new store to achieve a success after opening.
The CHECKLIST below shows common discussion items that should be discussed internally upon making a decision on new store location.
Store Development and Store Operations should discuss these discussion items from the same perspective and forecast the new store sales.
Then, profitability should be simulated based on the sales forecast, taking the rent and the labor costs into account.
If these numbers cannot fulfill internal “go” criteria, Store Development should renegotiate economic conditions, floor space, sign visibility etc. with the landlord. Only when the numbers fulfill internally agreed “go” criteria, the real estate site becomes the new store location candidate, that proceeds to agreement stage with the landlord.
CHECKLIST (in English)
|Category||Discussion Topic||Discussion Items|
|Data||Store front traffic (passersby, car), TG (Traffic Generator), Incoming and outgoing train station passengers, etc.
Demographic data within hypothetical trade-area (income segment, population growth, age segment, total annual retail sales turnover, car ownership ratio, etc.)
Information about the commercial facility of tenant owner (Population within facility, total visitors, number of tenants, total annual sales turnover of the facility, etc.)
|Transportation||Foot, Bicycle, Car, Train, etc.|
|Customer Type||Age, Gender, Occupation: ratio by time of the day|
|Future Business Potential||Redevelopment plans, Renovation plans (whether traffic line change or not in the future?)
How many stores to build in the neighborhood? (sharing of the market completion image)
What concept store or brand to develop and where? What are the roles of each store (design, usage purpose, etc.)?
|Competition||Competitor: Store development plan within the area, Location, Sales, Store size, Sign, Number of clerks, opening hours, customer segment, etc.
Existing stores (of own brand): Profitability, Contract condition and status, Renovation plans, etc.
Real Estate Site Conditions
|Visibility||Is the location easy to recognize by users?
Is the storefront width enough?
Is it possible to put up the sign effectively? etc.
|Traffic Line||Volume / strength / direction / necessity
of storefront traffic
|Layout Plan||Size (number of Tsubo*), Number of seat,
Opening hour,Seat turnover rate, etc.
|Business||Contract condition, Contract years, Economic requirement, Profitability, Investment recovery ratio, Cannibalization to neighborhood existing stores, etc.|
|Credit||Corporate registration of the building / land
Landlord’s credit research results, asset situation,
* Tsubo is a Japanese unit of area measurement for real estate. 1 Tsubo is about 3.3 square meters.
CHECKLIST (in Japanese)