Deck 8: Retail Site Location

Question 1

Which of the following is NOT true?

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

Answer 1

A
Explanation: Because locations involve a commitment of resources over a long time horizon,retailers consider the locations that generated the highest long-term profits.

Question 2

An adjacent store is one that does NOT create its own traffic and whose trade area is determined by the dominant retailer in the shopping center.

Answer 2

False
Explanation: This describes a parasite store.

Question 3

When using a multiple-regression analysis the retailer refers to the site and trade area characteristic for its most successful stores and finds a new site with similar characteristics.

Answer 3

False
Explanation: This describes the analog approach not the multiple-regression analysis.

Question 4

One of the most important factors affecting store sales is the number of vehicles and pedestrians that pass by the site,or the _____________.

A)traffic congestion
B)traffic flow
C)accessibility
D)traffic stimulator

Question 5

The interception of a site is the ease with which a customer may get into and out of a retailer.

Question 6

A co tenancy clause prohibits the landlord from leasing to retailers selling competing products.

Question 7

When evaluating specific areas for locations,U.S.Retailers often focus their analysis on a(n)_____________ because consumers tend to shop within this area.

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

Question 8

Traffic count is not as important for destination retailers as compared to retailers who rely on impulse purchases.

Question 9

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

Question 10

Which of the following does NOT affect the long term profit generated by stores when considering an area?

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 11

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

A)economics
B)economies of scope
C)sales cannibalization
D)channel integration
E)congestion of people

Question 12

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

Question 13

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 14

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(n):

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

Question 15

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

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

Question 16

Which of the following unit of analysis would consider a town of 10,000 inhabitants in its core urban area?

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

Question 17

One premise of the Huff gravity model is that the probability of a customer shopping at a particular store becomes greater as the size of the store increases.

Question 18

Retailers should continue to open stores as long as the marginal revenues achieved by opening a new store are greater than the marginal costs.

Question 19

Congestion can be viewed as a favorable attribute if it creates excitement.

Question 20

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 costs

Question 21

Locations in a shopping center affect both sales and occupancy costs.Which of the following 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 22

Traffic count is less important for:

A)Convenience stores
B)Destination retailers
C)Rural communities
D)Mall accessibility
E)Specialty retailers

Question 23

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 24

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 25

Why is traffic count particularly important for convenience stores?

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

Question 26

Which retailer would be the LEAST dependent on traffic counts?

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

Question 27

Which of the following 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 the different market segments and have a different,noncompeting 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 28

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

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

Question 29

Store locations in a mall that are visibly across the corridor from one another are ______ stores.

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

Question 30

LeeAnn 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 LeeAnn,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 31

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

A)Micro analysis
B)Natural barriers
C)Viscosity
D)Road development
E)Traffic flow and accessibility

Question 32

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 parents 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 33

What retailer 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 34

A food court in a mall is an example of ________________.

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

Question 35

Access to major highways,pedestrian traffic,and availability of mass transit are examples of which site characteristic?

A)Traffic flow and accessibility
B)Location characteristics
C)Restrictions
D)Costs
E)Competitive advantages

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

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

A)traffic flow
B)accessibility
C)potential sales for the site
D)characteristics of the trading zone
E)site characteristics

Question 38

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 39

Retailers try to locate their stores that appeal to similar target markets.Which of the following 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,which sells stuffed animal toys,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 40

When stores such as Bath & Body Works,Victoria 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 41

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 42

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 43

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 44

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 45

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 into their shops and offices;they feel compelled to stop and satiate their cravings.The Coffee Cup is an example of a(n):

A)Attraction store
B)Parasite store
C)Freeloading retailer
D)Kiosk or cart
E)Traffic-dependent store

Question 46

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 47

An automated retail shop or vending machine at the airport selling personal electronics does not create its own traffic,but rather depends on the foot traffic generated by travelers passing by.This vending machine would be considered a _______.

A)Detour store
B)Parasite store
C)Freeloading retailer
D)Dependent kiosk or cart
E)Traffic-dependent store

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

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.The Mediterranean Café is engaging in:

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

Question 50

Which of the following 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 51

What is a census block?

A)an area bounded on all sides by visible (roads,river,etc. )and invisible (county,state boundaries)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 a specific educational and economic status
E)a collection of adjacent blocks that contain between 300 and 3,000 people

Question 52

A store that does not create its own traffic and whose trade area is determined by the dominant retailer in the shopping center is considered a ___________.

A)freeloading retailer
B)cart or kiosk
C)arbitrary retailer
D)parasite store
E)traffic-dependent store

Question 53

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

A)Type of store
B)Competition
C)Assortment offered
D)Accessibility
E)Type of lease

Question 54

Which of the following 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 55

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 Raisinettes
D)the store in town with the largest selection of computer games
E)any of the above could be an example of a destination store

Question 56

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 57

A(n)_____________ is a contiguous geographic area that accounts for the majority of a store's sales and customers.

A)shopping area
B)trade area
C)media area
D)sale area
E)attractive area

Question 58

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

Question 59

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 60

_______________ 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 61

When using the ___________ 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.

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

Question 62

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 63

Which of the following is NOT true regarding GIS?

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 MapInfo.

Question 64

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 and the parallel lease
D)the development lease and the associated lease
E)the multiplex lease and the single unit lease

Question 65

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 size of the store and travel time for a customer to get to a store location
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 66

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 67

ESRI and other GIS suppliers have developed schemes for classifying geographic areas.The ESRI Community 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.
Thomas can be described as:

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

Question 68

When Benjamin purchased a camera at Best Buy,the cashier asked him for his home zip code.Best Buy was attempting to identify the trade area for the store by what approach?

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

Question 69

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

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

Question 70

Which of the following is TRUE about the spending potential index?

A)It compares average expenditure in a particular area for a product and compares it to the amount spent on that product nationally.
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 71

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

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

Question 72

Which of the following is NOT true about Huff Gravity Model?

A)It is used for estimating the sales of a retail store based on the concept of gravity
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 73

A _____ is a system of hardware and software used to store,retrieve,map and analyze geographic data along with the operating personnel and the data that goes into the system.

A)Geographical Information System (GIS)
B)Projection Map (PM)
C)Trade Area Topographical Map (TATM)
D)Retail Information System (RIF)
E)PRIZM system

Question 74

The objective of Huff's 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)determine the probability that a customer residing in a particular area will shop at a particular shopping center
E)create a comparative model which allows the retailer to determine the ideal location

Question 75

Which of the following 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 76

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 for a new store.
E)Multiple regression analysis cannot be used to determine potential sales like the analog approach.

Question 77

With a percentage lease,retailers pay a percentage of sales as well as a(n)______________ which is based on a percentage of their square footage of leased space.

A)maintenance fee
B)inflation surcharge
C)space charge
D)minimum fee
E)cushion fee

Question 78

What 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 3,000 people
D)Census data are collected every ten years

Question 79

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

A)The Huff's 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's model that can supplement the findings of the Huff's model.
D)The Huff's model only offers comparative data and is unable to assist in choosing specific sites.
E)The Huff's model only offers information about income levels in comparison to the size of the shopping area.

Question 80

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