Retailing Management 9th Edition by Levy – Test Bank

Complete Test Bank With Answers

 

 

Sample Questions Posted Below

 

Exam

Name___________________________________

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) Factors to consider in an accessibility analysis include:

A) road pattern

B) congestion

C) ingress/egress

D) amount of parking facilities

E) All of these

2) Ingress/egress refers to:

A) the renewal and rebuilding of offices, housing, and retailers in deteriorating areas

B) the ease of entering and exiting a site’s parking lot

C) ability to see the store and enter the parking lot safely

D) the amount of crowding of either cars or people

E) None of these

3) A geographic area encompassing most of the customers who would patronize a specific

retail site and that accounts for the majority of a store’s sales and customers is called a:

A) site

B) target market

C) trade area

D) CMA

E) region

4) Location decisions can be divided into four levels: country, region, trade area, and:

A) neighbourhood

B) specific site

C) province

D) CMA

E) district

5) A store that sold sheet music, band instruments, and offered in-store lessons for the

instruments would be most interested in ________ when an analysis of the trade area

was conducted for the new store.

A) lifestyles of the trade area population

B) the business climate

C) income and occupations of trade area population

D) the span of managerial control

E) size and composition of households in the trade area

1)

2)

3)

4)

5)

16) Retail promotion and distribution economies of scale can be achieved with:

A) a sound business climate

B) supportive lifestyle demographics

C) a saturated trade area

D) little competition

E) multiple locations

7) The owner of a store that sold New Age music, aromatherapy candles, and herbal

supplements would be most interested in ________ when he did an analysis of the trade

area for his new store.

A) lifestyles of the trade area population

B) income and occupations of trade area population

C) the business climate

D) size and composition of households in the trade area

E) the span of managerial control

8) Which of the following would be considered when assessing demographic

characteristics?

A) Incomes

B) Education

C) Size of households

D) Population growth

E) All of these

9) When Dale was considering establishing a used record and CD shop, he looked at the

average household incomes of the local residents, their education level, and the growth

of the area. Which of the following factors was Dale considering?

A) Business climate

B) Span of managerial control

C) Demographics

D) Competition

E) Economies of scale

10) A trade area that offers customers a good selection of goods and services while allowing

competing retailers to make good profits is said to be:

A) saturated

B) understored

C) market developed

D) competitively depleted

E) overstored

6)

7)

8)

9)

10)

211) Burger King seeks locations where their major competitor is McDonald’s because they

believe it’s important to have a strong competitor so Burger King can develop methods to

allow them to successfully compete with them. These locations could be considered as:

A) competitive trade areas

B) trade specific locations

C) saturated trade areas

D) overstored trade areas

E) understored trade areas

12) To satisfy the needs of people living in small towns, the president of a department store

chain located her stores away from the larger cities. It could be said that the president had

a strategy to locate in:

A) understored trade areas

B) overstored trade areas

C) urban trade areas

D) abundant trade areas

E) undersaturated trade areas

13) An area that has too few stores selling a specific good or service to satisfy the needs of

the population is said to be an:

A) overstored trade area

B) underutilized trade area

C) underpopulated trade area

D) overpopulated trade area

E) understored trade area

14) Hardee’s fast food restaurant chain located its restaurants in small towns that the larger

chains had ignored because they believed the market was too small to be profitable.

Hardee’s was the first fast-food operation in many small towns, and the chain was

successful. Hardee’s management looked for regions that were ________ in terms of

fast-food establishments.

A) understored

B) market-depleted

C) unsaturated

D) underpromoted

E) underutilized

15) Three types of shopping situations are convenience shopping, comparison shopping, and

A) specialty shopping

B) advantage shopping

C) strategy shopping

D) unique shopping

E) off-price shopping

11)

12)

13)

14)

15)

316) When Jordan’s Furniture, The Couch Potato (furniture store), The Bombay Furniture

Company and Urban Barn all locate close to each other in the city they are allowing

consumers to

A) specialty shop

B) category shop

C) comparison shop

D) convenience shop

E) destination shop

17) Category specialists consumers will go to even if it is inconvenient are called

A) dealers

B) outlet centres

C) malls

D) destination stores

E) unique merchandisers

18) Why have suburban shopping centres grown between 1950 and 1980?

A) Municipal shopping became difficult after business hours.

B) Downtown shopping centres became unkempt and crime ridden.

C) During this time, the population shifted to the suburbs.

D) Local governments mandated the growth to attract urbanites.

E) Urban dwellers found it easier to shop in the suburbs.

19) On his way home from work Barnard stopped at a shopping centre. He parked right in

front of the dry cleaners where he could pick up his suit. He did not have to move his car

because right next door was a gift shop where he could pick up a baby gift for his new

niece. Conveniently enough, next door to that was a Mac’s Milk where he purchased

essentials like milk and cereal. Barnard was shopping in what type of shopping centre?

A) Strip centre

B) Central business district

C) Power centre

D) Mall

E) Fashion/specialty centre

20) Cathy needed new jeans for the cool change in the weather. She decided to drive 20

minutes to a shopping centre. Once there, she had to search for a parking spot and walk

to get to the stores, but when she got inside, she was warm and could leisurely walk to a

variety of stores that carried the assortments she was seeking. Cathy was shopping in

what type of shopping centre?

A) Power centre

B) Mall

C) Central business district

D) Strip centre

E) Fashion/specialty centre

16)

17)

18)

19)

20)

421) The two major configurations of shopping centres are:

A) Freestanding and enclosed

B) Downtown and suburban

C) Staple and fashion

D) Outlet centres and theme centres

E) Strip centres and enclosed malls

22) Which of the following retailers would most likely be found in a power centre?

A) An independent toy store, a women’s apparel store, a dry cleaner, and a shoe store

B) A liquor store, a convenience store, and a hair salon

C) Home Depot, Winners, and Best Buy

D) Starbucks Coffee and an independent retail bookstore

E) A Shoppers Drug Mart, a Sears, and a Loblaws Grocery

23) Which of the following statements about shopping malls is true?

A) Managers of shopping malls either want to have all specialty stores or all shopping

goods stores–never a mix of the two.

B) The tenant mix in a shopping mall is not planned.

C) Each retailer is responsible for the external environment outside its store.

D) Shopping malls have lower rents than central business districts.

E) None of these statements about shopping malls are true.

24) Even though planned shopping centres are an excellent site option for retailers, they have

their disadvantages. Which of the following describes one of these disadvantages?

A) Rents in malls are often higher than at other locations

B) The developer has no control over exterior signs

C) Competition is kept to a minimum because developers try not to have more than

one specialty store for each product category

D) Each retailer is allowed to establish his/her own hours of operation

E) All of these are disadvantages

25) What are some of the challenges being faced by malls?

A) Malls are being challenged as competition from other retail locations (like power

and lifestyle centres, etc.).

B) Many malls are old and unappealing to shoppers.

C) The apparel business continues to be weak, causing some specialty stores to close.

D) Shoppers are looking for “value” alternatives to stores found in malls.

E) All of these are challenges being faced by malls.

21)

22)

23)

24)

25)

526) Shopping centres that focus on posh neighbourhoods, high-income areas with an

outdoor, traditional streetscape can be considered as:

A) convenience centres

B) lifestyle centres

C) regional malls

D) off-price centres

E) outlet centres

27) Hazelton Lanes in Toronto is a shopping centre composed of upscale apparel stores, gift

shops, and many high-quality boutiques. It is an example of a/an:

A) fashion/specialty centre

B) convenience centre

C) off-price centre

D) outlet centre

E) price-oriented centre

28) Beatrice has been sporting a new diamond ring for some time and finally decided to shop

for the wardrobe to match. She selected a shopping centre featuring upscale apparel

shops and boutiques that was two hours away from her home, but according to Beatrice,

it was “well worth the drive”. Beatrice was probably going to shop in a/an:

A) outlet mall

B) convenience centre

C) fashion/specialty centre

D) regional mall

E) power centre

29) Where would you most likely find a fashion/specialty centre?

A) At highway interchanges

B) In small towns

C) In high-income trade areas

D) Near discount store malls

E) In middle-class neighbourhoods

30) Which of the following best describes outlet centres?

A) They are typically located near traditional regional malls

B) They never offer first-quality, full-line merchandise

C) They may have a trade area of 100 kilometres or more

D) They are generally near regional shopping centres

E) They are usually enclosed

26)

27)

28)

29)

30)

631) Why has the number of outlet centres declined?

A) Customers are not satisfied with broken assortments and damaged products

B) Customers can buy below full retail prices elsewhere

C) Traditional retailing has become more price-competitive

D) Customer demand has declined

E) All of these are true.

32) The Homer Laughlin China Company in the U.S. state of West Virginia manufactures

Fiesta china in a variety of colours. The factory has a store where they feature Fiesta

products that are discounted or distressed. This type of centre is called a/an:

A) demalling centre

B) outlet centre

C) regional centre

D) lifestyle centre

E) fashion/specialty centre

33) Which of the following statements about outlet centres is true?

A) Outlet centres have the no-frills look of warehouse stores

B) It is predicted that the number of outlet centres will double over the next decade

C) Outlet centres sell only irregulars and overruns

D) Outlet centres are not found outside of the United States

E) Outlet centres are often located some distance from regional shopping centres

34) Why would a small retailer be interested in opening a shop in a mall kiosk?

A) The retailer can offer seasonal merchandise and then close after the season.

B) Kiosks can be in prime locations.

C) A kiosk is relatively inexpensive compared to a regular store.

D) The short-term leases can be helpful if the business fails.

E) All of these.

35) Scott wants to open a holistic medicine shop with merchandise he claims will cure the

common cold. He has $26,000 to invest in the business. How might a kiosk satisfy his

needs?

A) Kiosks are located outside of freestanding sites.

B) Kiosks are much less expensive to rent than a store.

C) Mall managers typically have a no-compete clause in the contracts for store space

rentals.

D) He would be given a long-term lease.

E) All of these describe reasons why he would like to begin his business in a kiosk.

31)

32)

33)

34)

35)

736) Where is a central business district located?

A) Airports, hotel lobbies and convention centres

B) Malls

C) Downtown business areas

D) Regional centres

E) Freestanding sites

37) Water Street in St. John’s houses many professional services, as well as specialty stores,

apparel boutiques, restaurants, and gift shops. The street has a high volume of pedestrian

traffic. Water Street can be considered as an example of a:

A) regional centre

B) power centre

C) neighbourhood business district

D) central business district

E) shopping centre

38) Why would a retailer choose not to expand to a central business district?

A) Business is slow in the evening

B) Limited parking

C) High security may be necessary

D) Shoppers are subjected to weather conditions

E) All of these

39) Which of the following statements about the central business district (CBD) is true?

A) Shopping at CBDs is heaviest on weekends and at night

B) The most successful CBDs for retail trade are those with a large number of residents

living in the area

C) CBDs have not experienced any gentrification

D) Like modern shopping centres, CBDs are typically well planned

E) All of these statements about CBDs are true

40) Downtown locations usually offer:

A) fewer shoppers than CBDs

B) supermarkets as anchors

C) full-line department stores

D) entertainment and recreational activities

E) higher rents than traditional central business districts

41) Which of the following statements about downtown locations (“Main Streets”) is true?

A) Occupancy costs are generally lower than the primary CBDs

B) Main Streets tend to attract more people than central business districts

C) As a group, retailers are avoiding Main Streets because it is such a new concept

D) Main Streets typically offer more recreation and entertainment activities than CBDs

E) All of these statements about Main Streets are true

36)

37)

38)

39)

40)

41)

842) Tearing down old buildings or restoring them into new offices, housing developments,

and retailers is an example of:

A) commercialization

B) trade area expansion

C) modernization

D) retail segmentation

E) gentrification

43) When a city’s old buildings have been modernized, cracked sidewalks have been

replaced with wide brick walks, and new multipurpose office buildings have opened, this

is an example of:

A) retail segmentation

B) trade zone expansion

C) gentrification

D) modernization

E) commercialization

44) Costco requires a tremendous amount of operating space; therefore, you are most likely

to find them located in a/an:

A) off-price centre

B) discount-anchored centre

C) neighbourhood centre

D) central business district

E) freestanding site

45) What are the advantages gained from locating in a freestanding site?

A) High rent, but visible location

B) Ample parking for customers

C) Restrictive hours

D) Synergistic neighbours

E) All of these

46) The most serious disadvantage inherent in a freestanding site is:

A) lack of restrictions on merchandise sold

B) loss of the ability to restrict hours of operation

C) lack of synergy with other stores

D) high rent

E) loss of direct competition

42)

43)

44)

45)

46)

947) ________ are shopping centres that include office towers, hotels, residential complexes,

civic centres, and convention complexes on top of or attached to the shopping centre.

A) Mixed-use developments

B) Central business districts

C) Convention centres

D) Multilevel marketing centres

E) Shopping malls

48) Mixed-use developments (MXDs) are popular with retailers because they:

A) offer low rent

B) have high security

C) bring additional shoppers to the store

D) offer short-term leasing agreements

E) provide free storage facilities to attract retailers

49) Why are airports such a profitable place to have a retail business?

A) Airport leases are lower

B) International tourists and local residents like to shop in Canadian airports

C) Waiting time allows people to spend money in airport shops

D) Wages are lower than in cities

E) Sales per square foot are similar to shopping malls

50) When Lonnie took her kids to Walmart, she noticed a McDonald’s restaurant near the

entrance, which prompted her to stop for lunch. This restaurant is a great example of

a/an:

A) power centre

B) store within a store

C) freestanding site

D) merchandise kiosk

E) mixed-use development

51) A ________ is one in which the merchandise, selection, presentation, pricing, or other

unique factor act as a magnet for customers.

A) destination store

B) theme/festival centre

C) service centre

D) shopping goods store

E) freestanding site

47)

48)

49)

50)

51)

1052) Bob finally got the nerve to tattoo his girlfriend’s name on his arm. The tattoo parlour,

Tattoo On You is located 10 kilometres away. For Bob, that parlour is an example of

a/an:

A) shopping goods store

B) theme/festival centre

C) destination store

D) freestanding site

E) service centre

53) How would you classify products you would most likely find at 7-Eleven or Sobeys?

A) unsought goods

B) fabricated merchandise

C) specialty goods

D) convenience goods

E) grocery goods

54) Why are grocery stores located in strip centres?

A) Better hours of operation as opposed to regional shopping centres

B) The synergy between grocery and specialty shops is lucrative

C) Supermarkets are price competitive, and strip centres have inexpensive rent

D) Marketing costs can be shared within the strip centre

E) All of these

55) Which of the following is an issue that affects the site decision?

A) Environmental issues

B) Signs

C) Condition of building

D) Zoning

E) All of these

56) Simon is planning to open a store for hockey enthusiasts, and has found an affordable

location in a small strip centre off a major highway. What concerns should he have when

he considers the accessibility of the site?

A) Visibility

B) Traffic flow

C) Road patterns

D) Artificial barriers, such as railroads tracks

E) All of these

52)

53)

54)

55)

56)

1157) If Wally wanted to analyze accessibility factors in the immediate vicinity of a retail site

for a pro-golf shop, he should evaluate:

A) the general state of the roads near the site

B) whether there are enough on and off ramps for the highway that passes through the

city

C) the natural barriers in the community, such as rivers and mountains

D) how visible the site signs are from the roads surrounding the site

E) all of these

58) In an accessibility analysis of a retail location in Niagara Falls, which type of retailer

would be most concerned about visibility?

A) A retailer of do-it-yourself merchandise

B) A retailer who depended on tourist dollars for its success

C) A large nursery

D) A restaurant with a four-star rating

E) An established bookstore with a loyal following

59) Which of the following refers to the customer’s ability to see the store and enter the

parking lot safely?

A) Congestion

B) Micro analysis

C) Visibility

D) Road condition

E) Natural barriers

60) In terms of trade areas, the owner of Bubba’s Bar and Grille defines his ________ as the

geographic area in which 65 percent of his customers live.

A) tertiary zone

B) primary zone

C) secondary zone

D) geographic zone

E) macro zone

61) When considering the trade area zone, Dillon should realize the ________ for his

grocery store includes all the people within a five minute drive of his store.

A) geographic zone

B) macro zone

C) secondary zone

D) primary zone

E) tertiary zone

12

57)

58)

59)

60)

61)62) In determining its trade zone areas, the owner of the local FTD florist, has identified the

geographic area that is within a ten minute drive of the store as the store’s:

A) micro zone

B) macro zone

C) tertiary zone

D) secondary zone

E) primary zone

63) Which of the following retailers might customers consider as a destination store?

A) The only shoe store in town that will dye shoes to match dresses

B) The store in town with the largest selection of computer games

C) The store in town with the lowest priced pharmaceuticals

D) The only store in town that carries CCM skates

E) Any of these could be an example of a destination store

64) Clark needed shoes for his child who had extra wide feet. The only shoe store in town

that carried them required a trip of three buses followed by a two block walk. To Clark,

that shoe store is a:

A) symbiotic store

B) drawing store

C) destination store

D) discount retailer

E) magnet store

65) Sherry is an armchair tourist inhibited from the real thing by a lousy job, but she makes

up for it by indulging in foreign films. This Friday, she plans to drive into the city, about

20 kilometres away, to check out a shop specializing in foreign films. To Sherry, this

shop is a:

A) shopping goods store

B) magnet store

C) primary zone store

D) destination store

E) symbiotic store

66) Which of the following is least likely to be a destination store?

A) An IMAX cinema

B) A building supplies store

C) A new car dealership

D) A home electronics store

E) A convenience shop in a hotel

62)

63)

64)

65)

66)

1367) A store that does not create its own traffic and whose trade area is determined by the

dominant retailer in the shopping centre is considered a:

A) tertiary store

B) destination store

C) symbiotic store

D) primary store

E) secondary store

68) The Coffee Cup is a small town donut shop located in the heart of the central business

district. Hundreds of people pass the entrance on their way to the shops and offices and

feel compelled to stop and satiate their cravings. The Coffee Cup is an example of a:

A) destination store

B) freeloading store

C) primary store

D) symbiotic store

E) secondary store

69) Why do retailers use Statistics Canada Census data?

A) They provide retailers with demographic information.

B) The literature provides retailers with quarterly economic trends that are easily

understood.

C) Retailers use the information provided when entering international markets.

D) The information provides updates and descriptions of current fads.

E) All of these are true.

70) Which of the following can be used to determine how many customers are in a trade area

and where they live?

A) primary research

B) customer spotting

C) geographic research

D) customer clustering

E) None of these.

71) The Village Green, a woman’s clothing store, took a map of the city and the cheques

written by its customers during the last quarter. The store’s owner then marked the

address of each customer on the map with a map pin. By looking at where the pins

clustered on the map, she could determine her trade area. She was engaged in:

A) customer clustering

B) residential research

C) customer spotting

D) geographic research

E) primary research

14

67)

68)

69)

70)

71)72) A ________ is a computerized system that enables retail analysts to visualize

information about their customers’ demographics, buying behaviour, and other data in a

map format.

A) Geographic Information System (GIS)

B) Projection Map (PM)

C) Gravitational Model

D) Trade Area Topographical Map (TATM)

E) Retail Information System (RIS)

73) A Geographic Information System (GIS):

A) is a spatial database

B) is used to isolate target customer groups

C) contains data that are collected at the point of sale

D) identifies the boundaries of a trade area

E) is accurately described by all of these

74) Inga will be opening her futon store in Regina, but she’s concerned about competition.

Where should she look to understand about potential competition?

A) The local newspaper advertising

B) The chambers of commerce

C) The Internet

D) The Yellow Pages

E) All of these

75) What is the difference between multiple regression analysis and the analogue approach?

A) The analogue approach uses statistics rather than judgement to predict sales

B) Multiple regression analysis uses statistics rather than judgement to predict sales for

a new store

C) Multiple regression analysis cannot be used to determine potential sales like the

analogue approach

D) Multiple regression analysis uses geodemographic segmentation systems to

determine potential sales in a new market

E) The analogue approach gathers its information through nationwide customer

surveys

72)

73)

74)

75)

1576) The objective of Huff’s Gravity Model is to:

A) create a comparative model that allows the retailer to determine the ideal location

B) determine the hierarchy of retailing activities according to the assortment of

merchandise available

C) determine the probability that a customer residing in a particular area will shop at a

particular shopping centre

D) define the relationship between the size of a shopping area and the area’s income

levels

E) define the relative ability of two cities to attract customers from the area between

them

76)

77) Why is it important to use the Huff’s Gravity Model in conjunction with the analogue

and regression methods?

A) The analogue and regression methods consider too many variables other than

demographics

B) The Huff’s model only offers comparative data and is unable to assist in choosing

specific sites

C) The Huff’s model does not utilize demographic variables

D) The Huff’s model only offers information about income levels in comparison to the

size of the shopping area

E) There has been additional supportive research since the Huff’s model that can

supplement the findings of the Huff’s model

77)

ESSAY. Write your answer in the space provided or on a separate sheet of paper.

78) Why have location decisions become more important in recent years?

79) What demographic characteristics would affect the location of a McDonald’s?

80) What should a retail analyst consider when assessing overall demand for a particular region or trade

area?

81) Why did suburban shopping centres grow between the 1950s and 1980s?

82) What are the advantages and disadvantages of strip shopping centres?

83) Why have power centres become so popular?

84) What are three advantages that shopping malls have over alternative locations? Give examples for

each advantage.

85) If you were a mall manager of an old mall that was losing business, what could you do to revitalize

your mall?

1686) Why are Toys “R” Us stores found as freestanding sites or in power centres?

87) How do Main Streets differ from central business districts (CBDs)?

88) What are the two stages of assessing accessibility in a trade area analysis? Briefly describe them.

89) Why do retailers consider tertiary zones as part of their trade area when these customers only

occasionally shop at the store or shopping centre?

90) Some people think that Walmart can be a destructive force to competition and therefore a detriment

to have in a trade area, yet many retailers continue to be lucrative and exist as Walmart’s neighbour

in a shopping centre. Comment on how this is possible.

91) What are some of the ways retailers obtain information when customer spotting?

92) What are the four steps of the analogue approach to estimating demand?

93) On what premise are the gravitation models that are used to measure trade areas based?

94) A number of complementary analytical methods are used to estimate the demand for a new store.

One of the most widely used techniques is known as the analogue approach. Discuss the 4-steps that

one would undertake using the analogue method.

95) Why is store location often the most important decision made by a retailer? Give an example of a

firm that has made a mistake with choosing it’s location.

96) What are the two primary trade-offs when deciding where to locate a store?

97) What is a trade area?

98) A bakery that wanted to distinguish itself from its competition by being open 24 hours a day would

probably not be found in a shopping mall. Why?

99) What are the advantages of malls?

100) What are some of the challenges faced by malls?

101) In the face of problems and declining business, what are malls doing to combat the problem?

102) What type of shopping centre is composed of upscale apparel shops, boutiques, and gift shops

carrying selected fashions or unique merchandise of high quality and price?

103) Where are “Main Street” shopping districts located?

17104) What is the renewal and rebuilding of offices, housing, and retailers in deteriorating areas, coupled

with the influx of affluent people that usually displaces earlier, poorer residents?

105) What type of a site would Canadian Tire, a category specialist, most likely select?

106) What is the most serious disadvantage of locating in a freestanding location?

107) Why do real estate developers like Mixed-Use Developments?

108) What concept are retailers utilizing when a shopper can do his/her banking while grocery shopping?

109) The Hobby Shop features handicrafts, model trains, model cars and planes, as well as classes. It

doesn’t matter where it is located because it seems to have a natural draw. What type of store is it?

110) What is the difference between road pattern and road condition?

111) Why are trade areas that are divided into two or three zones called polygons?

112) What are the three types of information required to define a trade area?

113) What are three methods of estimating demand for a new store?

114) Which of the approaches to determining the retail potential of a trade area uses a statistical model

that predicts sales at existing store locations?

115) Discuss why outlet centres are declining as a consumer preferred place to shop. Explain what outlet

centres are doing to combat this?

18Answer Key

Testname: UNTITLED5

1) E

2) B

3) C

4) B

5) A

6) E

7) A

8) E

9) C

10) A

11) C

12) A

13) E

14) A

15) A

16) C

17) D

18) C

19) A

20) B

21) E

22) C

23) E

24) A

25) E

26) B

27) A

28) C

29) C

30) C

31) E

32) B

33) E

34) E

35) B

36) C

37) D

38) E

39) B

40) A

41) A

42) E

43) C

44) E

45) B

46) C

47) A

48) C

49) C

50) B

19Answer Key

Testname: UNTITLED5

51) A

52) C

53) D

54) C

55) E

56) E

57) E

58) B

59) C

60) B

61) D

62) D

63) E

64) C

65) D

66) E

67) C

68) D

69) A

70) B

71) C

72) A

73) E

74) E

75) B

76) C

77) C

78) Location decisions have become more important in recent years because (1) there are more retailers

opening new locations, (2) there has been a slowdown in population and new shopping centre

construction, (3) a retailer may find a suitable location, but high rent, complicated leases or expensive

fixturing, (4) the best locations are already taken.

79) The retailer would be concerned about the size and composition of the households in its market areas as

well as the age of the household members, the income-level of the households, culture and diversity.

Students may suggest other important variables.

80) To assess overall demand in a particular region, market or trade area, the retail location analyst should

consider economies of scale versus cannibalization, the populations demographic and lifestyle

characteristics, the business climate, competition from other retailers and the retailer’s propensity to

manage multiple stores.

81) The population moved into the suburbs, this population shift caused a need for stores located close to

home, large shopping centres providing large assortments, and combining many stores under one roof

creating a synergy that attracts more customers, than if the stores were located separately.

82) The advantages of strip shopping centres are that they offer customers convenient locations, easy parking

and relatively low rent for the retailers. Their disadvantages are that there is no protection from the

weather, and they offer less assortment and entertainment options for the customers than the malls.

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83) The retailers that are part of the power centres (1) have experienced tremendous growth and prosperity

during the 1990s, (2) the power centres are natural locations for these big stores as they do not want to pay

the high rents of regional shopping malls, (3) retailers benefit from the synergy of being with other big-box

retailers, and (4) shoppers are seeking “value” alternatives to the stores found in malls.

84) Three advantages include (1) because of the many types of stores, merchandise assortments and

entertainment, malls have become the Main Street for shoppers, (2) the tenant mix is planned so that

customers can have a one-stop shopping experience with a well-balanced assortment of merchandise, and

(3) retailers and their customers don’t have to worry about the external environment as the mall’s

management takes care of maintenance, hours of operation, and it provides protection from the weather.

85) Answers could vary, but the text suggests the following: (1) turn the mall into a traditional town square

with entertainment and nontraditional mall tenants like doctors and dry cleaners to make it seem like a

town square in the 1950s. (2) Provide links to the communities by opening wellness centres, libraries, city

halls and family entertainment centres. (3) Demalling is a radical approach, but an option. It involves

demolishing a mall’s small shops and common areas, enlarging the sites occupied by department stores,

and adding entrances into the parking lot.

86) Category Specialists like Toys “R” Us are found freestanding or in power centres because (1) these

locations are cheaper than CBDs or malls, (2) easy access to parking is important because purchases are

often large and difficult to carry, and (3) category specialists are destination stores and people will shop

there regardless of the location.

87) Main Streets are types of CBDs. They are located in the traditional area of smaller towns, or a secondary

business district in a suburb or within a larger city. Main Streets and primary CBDs share many

characteristics, but their occupancy costs are generally lower; they do not draw as many people; and they

don’t offer the entertainment and recreational activities of primary CBDs.

88) The two stages of assessing accessibility in a trade area analysis are macro analysis and micro analysis.

Macro analysis considers the primary trade area and considers road patterns, road conditions and barriers.

Micro analysis concentrates on issues in the immediate vicinity of the site, such as visibility, traffic flow,

parking, congestion and ingress/egress.

89) There are several reasons retailers consider tertiary zones as a part of their trade areas. First, these

customers may lack adequate retail facilities close to home. Second, there may be excellent highway

systems to the store or centre so customers can get there easily. Third, customers may drive near the store

on their way home from work. Finally, customers are drawn to the store or centre because it is in or near a

tourist area.

90) Some symbiotic stores have learned to survive against the giant by providing products and services that

complement rather than compete with Walmart, and many actually benefit from its presence. Other

retailers compete directly with Walmart in certain categories, but have learned to provide either a more

interesting assortment or better service.

91) Retailers gain residence information from customer spotting by (1) credit card or cheque purchases, (2)

customer loyalty programs, (3) manually at the checkout, and (4) sometimes by collecting information

about automobile license plates and tracing them to the owner through purchased information from the

governments or private research companies.

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92) The analogue approach is divided into four steps: (1) conduct a competitive analysis to estimate potential

sales, (2) the current trade area is determined by using spotting techniques, (3) determine the trade area

characteristics based on demographic research and psychographic profiles, and (4) the characteristics of

the current store are matched with the potential new stores’ locations to determine the best site.

93) They are based on the premise that the probability that a given customer will shop in a particular store or

shopping centre becomes larger as the size of the store or centre grows and the distance or travel time to

the store decreases.

94) Step 1: Conduct a competitive analysis to estimate potential sales; Step 2: Define the current trade area;

Step 3: Determine trade area characteristics; Step 4: Match characteristics of current store with the

potential new store’s location to determine the best site

95) (1) Store location is typically the prime consideration in a customer’s store choice, and (2) locations have

strategic importance because they can be used to develop a sustainable competitive advantage.

96) The trade-offs have to do with the cost of the location versus its value to customers.

97) A geographic area encompassing most of the customers who would patronize a specific retail site, and that

accounts for the majority of the store’s sales and customers. It may be part of a city, or several

communities, depending on the type of store and products.

98) Shopping malls restrict the hours of operation for their tenants.

99) Malls can provide (1) shopping and entertainment, (2) the tenant mix is planned, and (3) retailers and their

customers do not have to worry about the external environment, because the mall management takes care

of the maintenance, and customers are protected from the weather.

100) Malls are competing with other retail locations, shoppers are seeking other value alternatives to malls, the

apparel business is weak, and many malls are old and unappealing to shoppers.

101) Malls are bringing in more entertainment to encourage shoppers to stay longer, they are bringing in

nontraditional mall tenants, they are linking to their communities by opening wellness centres and

libraries, and some are demalling.

102) Fashion/specialty centres

103) They are located in the traditional shopping areas of small towns, or secondary business districts in

suburbs or within a larger city.

104) Gentrification

105) A freestanding site

106) The most serious disadvantage is lack of synergy with other stores.

107) Developers like MXDs because they use space productively. Land costs the same whether a developer

builds a shopping mall by itself or builds an office tower over the mall.

108) Store within a store

109) Destination store

110) Road patterns refer to whether there are major arteries or highways in the primary trade area. Road

conditions include the age of the road, number of lanes, stoplights, congestion, and general state of repair

of roads in the primary trade area.

111) They are called polygons because their boundaries conform to streets and other map features.

112) The three types of information are (1) how many people are in the trade area and where they live, (2) how

much these people in the trade area will buy, and (3) competition in the trade area.

113) A retailer can use the analogue approach, regression analysis or Huff’s gravity model.

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114) Multiple regression analysis

115) At outlet centres, consumers have to deal with broken assortments, distressed or damaged goods, and less

convenient locations. Additionally, traditional retailing has become more price-competitive.

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