Deck 8: Retail Site Location

Question 1

The secondary trading area is the geographic area from which the shopping center or store site derives 50 to 70 percent of its customers.

Answer 1

False
Explanation: The primary trading area is the geographic area from which the shopping center or store site derives 50 to 70 percent of its customers.

Question 2

The _____ is the number of vehicles and pedestrians that pass by the site.

A) traffic wave
B) traffic flow
C) traffic count
D) traffic stimulator

Answer 2

B
Explanation: The traffic flow is the number of vehicles and pedestrians that pass by the site.

Question 3

When using the analog approach,the retailer finds a site and then describes the desired trade area characteristics.

Answer 3

False
Explanation: When using the analog approach,the retailer simply describes the site and trade area characteristics for its most successful stores and attempts to find a site with similar characteristics.

Question 4

Which of the following statements is not true in considering and evaluating store locations?

A) The best areas for locating stores are those that generate the highest return on investment in the short-term.
B) It is important to examine an area's level and growth of population and employment and how long such growth will continue and how it will affect demand for merchandise sold in its stores.
C) It is important to have the strategic fit of the areas' population with the retailer's target market.
D) It is important to consider local and state legal and regulatory environments affecting operating costs.

Question 5

Which of the following would not affect the operating costs of a store?

A) Having a large MSA
B) Having a small MSA
C) Proximity of the store to the distribution center
D) State regulatory environment
E) Congestion of people and cars

Question 6

Retailers must consider the trade-offs between lower operating costs and potential _____ from having multiple stores in an area.

A) economies of scale
B) economies of scope
C) sales cannibalization
D) channel integration
E) vertical integration

Question 7

The Huff gravity model is used to predict the probability that a consumer will patronize a store.

Question 8

A food court is an example of utilizing the principle of cumulative attraction.

Question 9

The best way to define the three trade zones is based on distance rather than driving time.

Question 10

In the United States,retailers often focus their analysis on a _____ because consumers tend to shop within this area.

A) micropolitan statistical area
B) competitive statistical area
C) statistical demographic area
D) metropolitan statistical area
E) trade area

Question 11

Connections to major highways,pedestrian traffic flow,and availability of mass transit are examples of _____.

A) accessibility
B) visibility
C) availability
D) cost
E) exclusivity

Question 12

Accessibility is lesser for sites located near major highways,on uncongested highways,and at streets with traffic lights and lanes that enable turns into the site.

Question 13

A city of 50,000 or more inhabitants,or an urbanized area of at least 50,000 inhabitants,with adjacent communities having a high degree of economic and social integration with the core community is called a:

A) metropolitan urban development.
B) competitive statistical area.
C) statistical demographic area.
D) metropolitan statistical area.
E) trade area.

Question 14

In a graduated lease,the rent increases by a fixed amount over a specified period of time.

Question 15

Although retailers gain economies of scale from opening multiple locations in an area,they also suffer diminishing returns associated with locating too many additional stores in an area.This is called:

A) channel competition.
B) economies of scope.
C) sales cannibalization.
D) channel integration.
E) operating turnover.

Question 16

A metropolitan statistical area (MSA)is a core urban area containing a population of more than 50,000 inhabitants.

Question 17

Which of the following does not affect the long-term profit generated by stores when evaluating store locations?

A) The economic conditions
B) Competition
C) The strategic fit of the areas' population with the retailer's target market
D) The cost of operating stores
E) The corporate centralization

Question 18

Conducting a competitive analysis is typically the first step in the selection of a site.

Question 19

A cotenancy clause prohibits the shopping center management from leasing to retailers that sell competing products.

Question 20

Which of the following refers to a town removed from larger U.S.cities,often by up to 100 miles?

A) Micropolitan Statistical Area
B) Competitive Statistical Area
C) Statistical Demographic Area
D) Metropolitan Statistical Area
E) Trade area

Question 21

A retailer that is hard to get to,even if the customer can see it,has low _____.

A) compatibility
B) accessibility
C) visibility
D) cumulative attraction
E) availability

Question 22

Retailers try to locate their stores that appeal to similar target markets.Which of the following statements is not true in explaining how and why retailers do it?

A) Customers want to shop where they will find a good assortment of merchandise.
B) Retailers consider complementary retailers in location selections.
C) Retailers must avoid locating close to other retailers that compete directly.
D) Retailers such as the Builder-A-Bear Workshop selling stuffed animal toys and the Disney Store try to have locations close to each other.
E) The principle of cumulative attraction states that a cluster of similar and complementary retailing activities have greater drawing power than isolated stores that engage in the same retailing activities.

Question 23

Store locations in a mall that are located next to one another are ______ stores.

A) adjacent
B) congestion
C) parasite
D) region
E) tertiary

Question 24

Which of the following retailers would be the most dependent on traffic counts?

A) 7-Eleven
B) Macy's
C) Bed,Bath and Beyond
D) Walmart Supercenter
E) Bill's Wash-n-Fold

Question 25

When stores such as Bath & Body Works,Victoria's Secret,Express,Abercrombie & Fitch all have store sites near each other in a shopping center,what is this an example of?

A) Multiple risks
B) Analog approach
C) Cumulative attraction
D) Consumer spotting
E) Diminishing adjacent

Question 26

Which of the following statements is not true in describing adjacent tenants?

A) Complementary,adjacent retailers have the potential to build traffic.
B) Competing adjacent retailers have the potential to build traffic.
C) Complementary retailers target different market segments and have a similar merchandise offering.
D) The principle of cumulative attraction states a cluster of similar and complementary retailing activities have greater drawing power than isolated stores.

Question 27

Traffic count is less important for:

A) convenience stores.
B) destination retailers.
C) grocery stores.
D) car washes.
E) specialty retailers.

Question 28

Which of the following site characteristics refers to the customer's ability to exit the highway and enter the parking lot safely?

A) Restrictions and cost
B) Natural barriers
C) Parking
D) Adjacent tenants
E) Traffic flow and accessibility

Question 29

A food court in a mall is an example of a(n)_____.

A) multiple risk
B) analog approach
C) cumulative attraction
D) consumer spotting
E) diminishing adjacent

Question 30

Which of the following principles explains the success of a shopping center whose tenants include Kohl's,Walmart,and Dick's Sporting Goods?

A) Multiple risk
B) Analog approach
C) Cumulative attraction
D) Consumer spotting
E) Diminishing adjacent

Question 31

Lee Ann was overwhelmed by the heavy traffic outside of her local discount retailer.Her experience in the store was no better.The aisles were packed,and the lines were long.To Lee Ann,this discounter didn't consider the problem of _____ when choosing the site for the store.

A) congestion
B) non-shopper access
C) flow of traffic
D) visibility
E) vulnerability

Question 32

Why is traffic count particularly important for convenience stores?

A) Convenience stores offer impulse merchandise.
B) Convenience stores are located only in MSAs that have a target market.
C) Traffic count means more pedestrian traffic.
D) Traffic count determines flow and accessibility.

Question 33

Retailers study traffic flow,street congestion,and parking space availability when considering a new store site to determine the potential site's _______.

A) parallel tenants
B) accessibility
C) adjacent tenants
D) availability
E) visibility

Question 34

At the Mall of America,all of the children's specialty stores are on the ground floor and are near the restaurant Rainforest Café which also targets adults with children.This would be an example of the principle of _____.

A) multiple risk
B) analog approach
C) cumulative attraction
D) consumer spotting
E) diminishing adjacent

Question 35

The _____ of a site is the ease with which customers can get into and out of the site.

A) traffic flow
B) traffic restriction
C) accessibility
D) vehicular traffic bypass
E) macro analysis

Question 36

The grouped location approach is based on the principle of _____,which states that a cluster of similar and complementary retailing activities will generally have greater drawing power than isolated stores that engage in the same retailing activities.

A) multiple risk
B) analog approach
C) cumulative attraction
D) consumer spotting
E) diminishing adjacent

Question 37

Which of the following retailers is the dependent on traffic counts?

A) 7-Eleven
B) Macy's
C) Home Depot
D) Old Navy
E) Hot Wings

Question 38

What is the advantage of having your adjacent tenant as a complementary retailer?

A) Shared parking expense
B) Better lease negotiations
C) Visibility
D) Less tenant restrictions
E) Builds customer traffic

Question 39

A store that is easy for potential customers to see has high _____.

A) compatibility
B) accessibility
C) store congestion
D) cumulative attraction
E) visibility

Question 40

Locations in a shopping center affect both sales and occupancy costs.Which of the following statements is not true in describing the relationships?

A) The more expensive locations are closest to the supermarket in a strip shopping center.
B) Shops,like a flower shop,which attract impulse buyers,should be close to the supermarket in a strip shopping center.
C) A destination store,like a shoe repair store,should be located close to supermarket in a strip shopping center.
D) Stores that cater to consumers engaging in comparison shopping are benefited from being located in more expensive locations near the department store anchors.
E) A retailer such as Foot Locker need not be in the most expensive location because customers are in the market for this type of product before they even go shopping.

Question 41

Which of the following statements is not true in describing the size of trade area?

A) Convenience stores' trade areas are relatively small.
B) Category specialists have relatively large trade areas.
C) A retailer like Starbucks has a large trade area.
D) A retailer like IKEA has large trade areas.
E) A retailer like Best Buy has large trade areas.

Question 42

The Mediterranean Cafe features light cuisine and folk entertainment.It is located in the middle of an upper-class neighborhood.The owners are curious about where the customer base lives so that it can focus direct mail to those areas.For the last several weeks,employees scoped the parking lot noting license plate numbers so they could have a private research company trace them to the owners.Which of the following is the Mediterranean Café engaging in?

A) Customer clustering
B) Residential research
C) Financial demographics
D) Geographic research
E) Customer spotting

Question 43

Which of the following is not a factor affecting the size of the trade area?

A) Natural and physical barriers
B) Competition
C) Assortment offered
D) Accessibility
E) Type of lease

Question 44

Which of the following can be used to determine how many people are in a trade area and where they live?

A) Customer spotting
B) Demographic USA's Buying Power Index
C) Analog approach
D) Customer clustering
E) Centralization

Question 45

Which of the following is not a destination store?

A) RadioShack
B) IKEA
C) AMC Movie Theaters
D) The Home Depot
E) Kroger grocery store

Question 46

What is a census block?

A) An area bounded on all sides by visible and invisible features
B) A block of specific residents sharing similar demographics
C) A specific decennial used in comparison studies to demonstrate regional changes
D) A block including specific educational and economic status
E) A collection of adjacent blocks that contain between 300 and 4,000 people

Question 47

Which of the following statements is false in describing different categories of trade areas?

A) The primary trading area is the geographic area from which the shopping center or store site attracts 80% of its customers.
B) The secondary trading area is the geographic area of secondary importance in terms of customer sales,generating about 20-30 percent of the site's customers.
C) The tertiary trading area includes the area where customers who shop at store are coming from widely dispersed areas.
D) The best way to define the three trade zones is based on driving time rather than distance.

Question 48

Schnuck's Grocery Store is located in St.Louis,Missouri.The owner has taken a map and has drawn three different sized shapes around the store's location.Those people that are located in only the largest shape being beyond a 15 minute drive radius of the store are in what's referred to as the store's _____.

A) geographic market
B) market trading area
C) delineated market
D) tertiary trading area
E) inclusive trading area

Question 49

What is the drawback of using the Decennial Census of the United States?

A) The information in the Census is only for metropolitan areas.
B) The information included is gathered only once every ten years.
C) It is expensive to purchase and retailers usually find other means for the information.
D) The Census provides only numbers of people in an area,not specifics like household income,level of education,etc.
E) The information provided requires interpretation by analysts.

Question 50

The key feature of _____ data is that they are identified with a coordinate system (latitude and longitude)that references a particular place on Earth.

A) geographical information system (GIS)
B) projection map (PM)
C) trade area topographical map (TATM)
D) retail information system (RIF)
E) PRIZM system

Question 51

_____ is the process of locating the residences of customers for a store on a map and displaying their positions relative to the store location.

A) Customer spotting
B) Buying power tracking
C) The analog approach
D) Customer clustering
E) Pirating

Question 52

Fishing enthusiasts come for miles to shop at Shabby Bills,a shack that sells limited tackle and bait on the North Carolina Outer Banks.Bill attracts this crowd because of his expertise in the Outer Banks and local folklore.The Outer Banks would be considered Shabby Bills':

A) site location.
B) demographically similar area.
C) target market.
D) metropolitan complex.
E) trade area.

Question 53

A contiguous geographic area that accounts for the majority of a store's sales and customers is called a _____.

A) demographic
B) metropolitan complex
C) site location
D) trade area
E) target market

Question 54

In terms of trade areas,the owner of Bubba's Bar and Grille defines his _____ as the geographic area in which 70% of his customers live.

A) primary trading area
B) fundamental market
C) geographic market
D) secondary trading area
E) tertiary trading area

Question 55

The Village Green,a woman's clothing store,took a map of the city and the checks 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) geographic research
B) customer spotting
C) financial demographics
D) customer clustering
E) residential research

Question 56

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 lowest priced pharmaceuticals
C) The only store in town that carries Goobers and Raisinets
D) The store in town with the largest selection of computer games
E) All of these

Question 57

Which of the following statements is not true of geographic information systems?

A) It is used by retailers to find locations that maximize their sales and profits.
B) Its use develops a deeper understanding of the trade areas.
C) It combines demographic data,consumer spending patterns,and lifestyles in a geographic area.
D) It is based only on demographic census data.
E) Examples of GIS suppliers include ESRI,Claritas,and Pitney Bowes.

Question 58

Which of the following is not true about U.S.census data?

A) The census track is the smallest geographic entity for which census data is available.
B) There are eight million census blocks in the United States,each containing the residences of about 40 people.
C) The block group is a collection of adjacent blocks that contain between 300 and 4,000 people.
D) Census data are collected every ten years.

Question 59

Alyssa needed a new stirrup for her saddle.She had to drive 30 miles to the Western Tack store in order to make the purchase.To Alyssa,the Western Tack store is an example of a:

A) destination store.
B) drawing store.
C) magnet store.
D) country goods store.
E) tertiary-zoned store.

Question 60

When Benjamin purchased a camera at Best Buy,the cashier asked him for his home zip code.Which of the following approaches was Best Buy using to identify the trade area for the store?

A) Customer clustering
B) Residential research
C) Financial demographics
D) Geographic research
E) Customer spotting

Question 61

Which of the following is typically the step after conducting a competitive analysis during site selection?

A) Define present trade area.
B) Analyze trade area characteristics.
C) Conduct a situational analysis.
D) Match characteristics of present trade area with potential sites.

Question 62

Which of the following statements does not describe the appropriate use of different approaches for site selection?

A) Large retailers often use the Huff Gravity Model to estimate potential sales for a store site before site selection.
B) Regression analysis can consider the effects of wide range of factors affecting sales in stores.
C) The regression analysis is appropriate for small chains to find the best location.
D) Using the analog approach,the retailer describes the site and trade area characteristics for its most successful stores and attempts to find a site with similar characteristics.
E) The analog approach is not recommended for large chain stores like Walmart.

Question 63

Why is it important to use the Huff Gravity Model in conjunction with the analog and regression methods?

A) The Huff model does not utilize demographic variables.
B) The analog and regression methods consider too many variables other than demographic.
C) There has been additional supportive research since the Huff model that can supplement the findings of the Huff model.
D) The Huff model only offers comparative data and is unable to assist in choosing specific sites.
E) The Huff model only offers information about income levels in comparison to the size of the shopping area.

Question 64

With regression analysis used in location analysis,predictor variables are selected.Which of the following predictor variables would be more useful for a retailer who is contemplating opening a day care center than for a retailer of used books?

A) Number of households with children not attending school
B) Educational level of households
C) Average age of homes in trade area
D) Average age of head of household
E) Average number of cars in each household

Question 65

Which of the following is typically the last step in site selection?

A) Define present trade area.
B) Analyze trade area characteristics.
C) Conduct a situational analysis.
D) Match characteristics of present trade area with potential sites.

Question 66

Which of the following leases are most commonly used by community and neighborhood centers?

A) Percentage lease
B) Pro bono lease
C) Sliding scale lease
D) Fixed-rate lease
E) Variable-rate lease

Question 67

What is the difference between multiple regression analysis and the analog approach?

A) The analog approach gathers its information through nationwide customer surveys.
B) Multiple regression analysis uses geo-demographic segmentation systems to determine potential sales in a new market.
C) The analog approach uses statistics rather than judgment to predict sales.
D) Multiple regression analysis uses statistics rather than judgment to predict sales at existing store locations.
E) Multiple regression analysis cannot be used to determine potential sales like the analog approach.

Question 68

ESRI and other GIS suppliers have developed schemes for classifying geographic areas.The ESRI Tapestry Segmentation scheme classifies neighborhoods into 65 categories.How would you classify the following person? Thomas is a recent college graduate who accepted an assistant buying position with Macy's in New York City.After six months,his commitment to the company led him to a promotion,and a raise.Thomas rents an apartment with his girlfriend Grace,who works as a stockbroker.Together they spend weekends shopping and meeting friends,and sometimes they travel to Boston for a change in scenery.Which of the following most accurately describes Thomas?

A) Generation X
B) Metro renter
C) Metro spender
D) Metron
E) Tapestry scheme

Question 69

A(n)_____ prohibits the landlord from leasing to retailers that sell competing products.

A) prohibited-use clause
B) exclusive-use clause
C) escape clause
D) fixed-rate leases
E) inclusive-use clause

Question 70

The objective of Huff gravity model is to:

A) determine the hierarchy of retailing activities according to the assortment of merchandise available.
B) define the relative ability of two cities to attract customers from the area between them.
C) define the relationship between the size of a shopping area and the area's income levels.
D) predict the probability that a customer will patronize a store.
E) create a comparative model which allows the retailer to determine the ideal location.

Question 71

According to the Huff Gravity Model,the two factors which attract consumers to a store location are:

A) travel time for customer to get to location and the number of customers in a trade area.
B) the attractiveness of the store's location and the time it takes to travel to the store.
C) the size of the store and the number of customers in a trade area.
D) travel time for customer to get to location and the distance between a customer's location and store location.
E) the distance between customer location and store location and the number of customers in a trade area.

Question 72

What factors should be considered in locating stores? Why should retailers consider those factors?

Question 73

What are the characteristics of a site that affect store sales and thus are considered in selecting a site?

Question 74

When using the _____,the retailer simply describes the site and trade area characteristics for its most successful stores and attempts to find a site with similar characteristics.

A) Huff gravity model
B) regression model
C) analog model
D) location model
E) cumulative attraction model

Question 75

A(n)_____ limits the shopping center management from leasing to certain kinds of tenants.

A) fixed-rate clause
B) cotenancy clause
C) exclusive-use clause
D) common area maintenance clause
E) prohibited-use clause

Question 76

Demarkus finally received financial backing from his wealthy aunt in order to open a pawn shop.He contacted the landlord of a nearby shopping center since he had his eye on a vacant storefront.To his surprise,his request for a lease was denied.What most likely prevented the landlord from leasing to Demarkus?

A) A fixed-rate clause
B) An escape clause
C) A licensing clause
D) A prohibited-use clause
E) An exit clause

Question 77

Which of the following statements is true about the Spending Potential Index?

A) It compares the local average expenditure by product to the national average amount spent.
B) It compares sales predictions based on various retail locations.
C) It is an index that provides retailers who are thinking of expanding into international markets with data on what consumers spend.
D) It compares what retailers spend on real estate in a given market and compares it to the national average.
E) It offers retailers information on property values as well as local tax information so they are better able to compare prior to purchasing.

Question 78

A shopping center landlord who has the agreement to increase the rent by a fixed amount over a specified period of time has negotiated a _____.

A) fixed-rate lease
B) graduated lease
C) maintenance-increase-recoupment lease
D) sliding scale lease
E) percentage increase lease

Question 79

Which of the following statements is not true about Huff Gravity Model?

A) The model specifies two factors that assess the probability: (1)the attractiveness of the store's location and (2)the time it takes a consumer to travel to the store.
B) It predicts the probability of a customer going to a specific store location.
C) The formula indicates that the larger the size of the store compared with competing stores' sizes,the greater the probability that a customer will shop at the location.
D) It is assumed that a larger size is generally more attractive in consumers' eyes because it means more merchandise assortment and variety.
E) The greater travel time or distance for the consumer,compared with that of competing locations,the higher probability that the consumer will shop at the location.

Question 80

Which of the following are the two basic types of leases?

A) The service lease and the strip lease
B) The percentage lease and the fixed-rate lease
C) The incentive lease and the parallel lease
D) The development lease and the associated lease
E) The multiplex lease and the single unit lease