How do I go about choosing a location for my retail business?

How do I go about choosing a location for my retail business?


The best retail location combines visibility, affordability and lease terms you can live with. Brick-and-mortar retailers need to be where the action is, so deciding where to put your business is every bit as important as the business you decide to go into.

Take the time to analyse the areas that appeal to you. There are three phases of choosing a location for your retail business: selection of a city, choice of an area or type of location within a city, and identification of a specific site.

In choosing a city, investigate these main factors:

  • Size of the city’s trading area
  • Population and population trends
  • Total purchasing power and who has it
  • Total retail trade potential for different lines of trade
  • Number and size of competition
  • Quality and aggressiveness of competition

Once you have a general idea of what city you like, choose an area or type of location within a city by evaluating these:

  • Customer attraction power
  • The nature of competition
  • Availability of access routes to the stores
  • Zoning regulations
  • Geographic direction of the city’s expansion
  • General appearance of the area
  • Sales and traffic growth prospects of the trade area
  • Demographics of neighbourhoods

These are factors in narrowing down your site choices:

  • Traffic flow
  • Complementary nature of neighbouring stores
  • Adequacy of parking
  • Vulnerability to competition
  • Cost of the site


Unfortunately, some retail landlords actually hinder the operation of their tenants’ businesses. In fact, the landlord may be largely responsible for the demise of the premises and retailers’ failure. For instance, some landlords restrict the placement and size of signs, forego or ignore needed maintenance and repairs, or rent adjacent retail spaces to incompatible or directly competing businesses.

Sometimes landlords lack the funds to maintain their properties. Rather than continuing to invest in their holdings and support their tenants, they try to squeeze out whatever they can get. In addition to speaking with current tenants, talk to previous tenants of the location you have in mind.

They can give you helpful information. Find out what businesses they were in and why they left.

  • Did they fail or just move?
  • What support or hindrances did the landlord provide?
  • Would they rent from this landlord again?

Zoning and Planning

Your local town planning office, which is usually located at the local municipality, can give you the latest mapping of the retail location and surrounding areas that you are considering. Here are some questions to think about:

  • Are there restrictions that will limit your operations?
  • Will construction or changes in city traffic or new highways present barriers to your shop?
  • Will any competitive advantages you currently find at the location you’re considering be diminished by zoning changes that will be advantageous for competitors or even allow new competitors to enter your trade area?

Most zoning and town planning departments can probably provide you with valuable insights to help you with information regarding retail locations.