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Shopping centre location analysis : sales volume estimating Currie, David Gordon 1973

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SHOPPING CENTRE LOCATION ANALYSIS: SALES VOLUME ESTIMATING  t>7  D a v i d Gordon C u r r i e B.A., U n i v e r s i t y o f B r i t i s h Columbia, 1966  A T h e s i s Submitted i n P a r t i a l F u l f i l m e n t o f The Requirements  f o r t h e Degree o f  Master of Business A d m i n i s t r a t i o n i n t h e F a c u l t y o f Graduate S t u d i e s  We a c c e p t t h i s t h e s i s as conforming t o t h e required standard  THE UNIVERSITY OF BRITISH COLUMBIA J u l y , 1973  In presenting  t h i s t h e s i s i n p a r t i a l f u l f i l m e n t of the  requirements  f o r an advanced degree a t the U n i v e r s i t y of B r i t i s h Columbia, I agree t h a t the L i b r a r y s h a l l make i t f r e e l y and  study.  I f u r t h e r agree t h a t p e r m i s s i o n f o r e x t e n s i v e  of t h i s t h e s i s f o r s c h o l a r l y purposes may o f my  a v a i l a b l e f o r reference  be g r a n t e d by the Head  Department o r by h i s r e p r e s e n t a t i v e s .  I t i s understood  c o p y i n g o r p u b l i c a t i o n of t h i s t h e s i s f o r f i n a n c i a l be a l l o w e d w i t h o u t my  written permission.  Department of The U n i v e r s i t y o f B r i t i s h Columbia Vancouver 8, Canada  copying  gain s h a l l  that not  ABSTRACT T h i s t h e s i s i s concerned w i t h t h a t p a r t o f  retail  l o c a t i o n a n a l y s i s which i n v o l v e s e s t i m a t i n g the s a l e s volume p o t e n t i a l f o r a proposed shopping c e n t r e . p r a c t i s e d methods and  I t examines the  a v a i l a b l e models employed I n the p r e d i c -  t i o n o f p o t e n t i a l s a l e s volumes. A s u r v e y of the l i t e r a t u r e d e a l i n g w i t h  techniques  of s a l e s volume e s t i m a t i o n r e v e a l e d t h a t the t h e o r y s a l e s volume e s t i m a t i n g was  behind  somewhat d i s j o i n t e d , s i n c e the models  and methods a v a i l a b l e emphasized d i f f e r e n t approaches and t o r s , and  ignored or inadequately  more, i t was  accounted f o r o t h e r s .  a p p a r e n t t h a t p r e d i c t i v e a c c u r a c y was  facFurther-  f a r from  s a t i s f a c t o r y w i t h the p r e s e n t l y a v a i l a b l e t o o l s o f a n a l y s i s . I t was  f e l t t h a t the problem r e v o l v e d around the assumptions and  f a c t o r s i n h e r e n t o r absent i n each model o r method. S i n c e e s t i m a t i n g a p o t e n t i a l s a l e s volume f o r a p r o posed c e n t r e i n v o l v e d e s t i m a t i n g the number of consumers w i l l p a t r o n i z e t h a t c e n t r e , i t becomes o b v i o u s t h a t an estimate  who  accurate  of expected consumer p a t r o n a g e n e c e s s i t a t e s an under-  s t a n d i n g of the f a c t o r s and  i n f l u e n c e s which m o t i v a t e consumers  i n t h e i r c h o i c e of a p a r t i c u l a r r e t a i l o u t l e t i n which to p u r chase d e s i r e d m e r c h a n d i s e .  I t was  f e l t t h a t by examining t h e s e  d e t e r m i n a n t s of consumer b e h a v i o u r , t h o s e f a c t o r s which are i n a d e q u a t e l y  some l i g h t c o u l d be shed on recognized  or  represented  i n the v a r i o u s methods and models examined i n t h i s t h e s i s . T h i s t h e s i s , then, f i r s t examines the v a l i d i t y l i m i t a t i o n s o f the many arguments, a s s u m p t i o n s , c o n c e p t s ,  and and  f a c t o r s c o n s i d e r e d t o be i m p o r t a n t i n a d i s c u s s i o n o f the d e t e r m i n a n t s o f consumer patronage b e h a v i o u r .  I t then examines  t h e v a r i o u s models and methods i n o r d e r t o a) determine  how  a d e q u a t e l y t h e y r e c o g n i z e and i n c o r p o r a t e t h e s e arguments, a s s u m p t i o n s , c o n c e p t s , and f a c t o r s i n t h e i r f o r m u l a e o r p r o c e d u r e s , and b) e v a l u a t e t h e i r a b i l i t y t o produce t h e o r e t i c a l l y sound, consistent predictions. The models and methods a r e found t o be l a r g e l y i n c a p a b l e of a c c u r a t e and c o n s i s t e n t p r e d i c t i o n s owing to t h e i r o v e r s i m p l i f i e d and i m p r e c i s e c o n s t r u c t i o n .  I n a d e q u a t e l y r e p r e s e n t e d con-  sumer patronage f a c t o r s are p r e s e n t e d w h i c h , i f t h e y were more e x p l i c i t l y r e c o g n i z e d , would tend t o Improve t h e p r e d i c t i v e c a p a b i l i t i e s o f the models and methods.  These f a c t o r s are shown  t o be a d d i t i o n a l f a c t o r s of a t t r a c t i o n and r e s i s t a n c e which i n f l u e n c e the consumer i n h i s c h o i c e o f a shopping  destination.  The main c o n c l u s i o n p r e s e n t e d i s t h a t i f t h e s e f a c t o r s were more p r e c i s e l y d e f i n e d and q u a n t i f i e d , and more  explicitly  r e c o g n i z e d i n the f o r m u l a e , e i t h e r t h r o u g h r e s t r u c t u r i n g the parameters  o r t h r o u g h expanding  the number o f v a r i a b l e s i n t h e  f o r m u l a e , the d e s c r i p t i v e and p r e d i c t i v e c a p a b i l i t i e s o f t h e s e models and methods might be Improved w i t h a c o r r e s p o n d i n g decrease i n the n e c e s s i t y f o r s u b j e c t i v e Judgment.  TABLE OP CONTENTS Chapter I  INTRODUCTION Statement o f t h e Problem Purpose o f t h e Study Methodology o f t h e Study O r g a n i z a t i o n o f t h e W r i t t e n Report  1 4 5 6  PART A" CONCEPTS AND FACTORS I N LOCATION ANALYSIS II  BACKGROUND AND PERSPECTIVE E v o l u t i o n o f t h e Shopping C e n t r e Movement . . . . P i l l i n g a Need Role of the Automobile E f f e c t on CBD R e t a i l i n g Shopping C e n t r e C h a r a c t e r i s t i c s Importance o f L o c a t i o n Importance o f L o c a t i o n f o r T e n a n t i n g I n c r e a s i n g Importance o f L o c a t i o n L o c a t i o n Research - H i s t o r y , S t a t u s , P r o s p e c t s . . Development o f L o c a t i o n Research L o c a t i o n Research - P r e s e n t S t a t u s N e c e s s i t y f o r F u r t h e r Development Summary  III  8 9 11 12 13 15 17 18 19 20 22 27 29  THE CONCEPT OF TRADE AREA C e n t r a l P l a c e Theory T h r e s h o l d and Range D e f i n i n g "Trade A r e a " Importance o f t h e Trade A r e a Concept Problem o f Trade A r e a D e l i n e a t i n g Consumer B e h a v i o u r and Trade Area D e l i n e a t i o n Trade A r e a S u b d i v i s i o n s Centre S i z e Assumptions i n Trade Area D e l i n e a t i o n D i f f e r e n t Trade A r e a s f o r D i f f e r e n t Merchandise Necessity f o r R e f i n i n g the D e l i n e a t i o n Procedure Summary  30 33 35 36 37 39 40 41 44^ 44 46  Chapter IV  BASIC FACTORS AND RELATIONSHIPS I N THE MEASUREMENT OP TRADE AREA POTENTIAL Introduction Market F a c t o r s Economic Outlook Population Income Employment P u r c h a s i n g Power ( D i s p o s a b l e Income) . . . . Distance D i s t a n c e as a T r a v e l Cost D i s t a n c e i n D r i v i n g Time D i s t a n c e v s . Merchandise D e s i r e d . . . . D i s t a n c e v s . P r i c e of M e r c h a n d i s e . . . D i s t a n c e v s . C l a s s o f Goods D i s t a n c e v s . Breadth of S e l e c t i o n . . . A c c e s s i b i l i t y , T r a f f i c , and T r a n s p o r t a t i o n D i f f e r e n t Trade A r e a s f o r D i f f e r e n t Goods Convenience Goods Shopping Goods S p e c i a l t y Goods Demographic F a c t o r s Income Groups Incomes, S o c i a l C l a s s , and Age Groups Geographic F a c t o r s Competition Saturation Under-supply o f Modern S t o r e s Future S t r a t e g y of Competitors C o m p e t i t i o n by C l a s s of Goods Assessing Competitors Market Share Site Factors S t o r e S i z e and Centre S i z e Centre S i z e and Cumulative A t t r a c t i o n Maximum v s . Optimum Centre S i t e .... Size vs. A v a i l a b l e P o t e n t i a l S i z i n g f o r the F u t u r e S i z e v s . R e q u i r e d Minimum S a l e s P e r Square Foot Tenant S i z e v s . A f f o r d a b l e Rent . . . . D e s i g n and L a y o u t S t o r e Types - Tenant Types Tenants v s . P o t e n t i a l Tenants as A t t r a c t o r s Tenant Mix Merchandise Mix M e r c h a n d i s e M i x and A t t r a c t i v e Power . Pricing Policies Image Parking Adequacy o f P a r k i n g F a c i l i t i e s Amenities Hours of B u s i n e s s Advertising Summary o f F a c t o r s  . .  .  .  47 48 48 49 53 55 56 58 58 59 61 62 62 63 63 70 71 71 73 74 74. 77 80 81 82 84 84 85 86 89 90 91 92 93 94 95  96 96 98 100 101 101 102 103 . 104 105 105 106 106 108 109 I l l 112  PART B TECHNIQUES I N LOCATION ANALYSIS Chapter V  METHODS FOR DETERMINING TRADE AREA POTENTIAL Introduction Market Share Method Vacuum C a l c u l a t i o n Method A n a l o g Method Summary  VI  115 116 124 129 133  MODELS FOR DETERMINING TRA.DE AREA POTENTIAL Introduction 134 E a r l y Models o f R e t a i l G r a v i t a t i o n 135 R e i l l y and Converse 135 Limitations 142 P r o b a b i l i s t i c Models 149 H u f f ' s Model 153 Lakshmanan and Hansen 159 L i m i t a t i o n s o f t h e P r o b a b i l i t y Models . . . . 165 Summary 183  VII  CONCLUSIONS Restatement o f t h e Problem Summary and C o n c l u s i o n s  BIBLIOGRAPHY  185 187  CHAPTER I INTRODUCTION Statement o f t h e Problem The growth o f t h e p l a n n e d shopping c e n t r e and i t s i n f l u e n c e on t h e r e t a i l i n g p a t t e r n i n m e t r o p o l i t a n a r e a s has been well chronicled.  The d e v e l o p e r s  those r e t a i l e r s who t e n a n t  1  o f these c e n t r e s , as w e l l as  these c e n t r e s , have l o n g r e a l i z e d t h e  c r i t i c a l importance o f l o c a t i o n i n d e t e r m i n i n g success  not only the  o f t h e c e n t r e as a whole, b u t a l s o t h e success o f each  i n d i v i d u a l business w i t h i n the c e n t r e .  For the developer, l o c a -  t i o n looms as t h e s i n g l e most i m p o r t a n t  f a c t o r t o c o n s i d e r both  when s t u d y i n g t h e economic f e a s i b i l i t y o f a proposed development, and when p l a n n i n g t h e a c t u a l c h a r a c t e r , s i z e , and t e n a n t mix f o r the proposed shopping c e n t r e .  Specifically, locational  considera-  t i o n s a r e paramount a t s e v e r a l d i f f e r e n t s t a g e s o f t h e p l a n n i n g process:  f i r s t , i n scanning a broad r e g i o n and p i n p o i n t i n g  p o s s i b l e s i t e s f o r development; second, i n d e t e r m i n i n g t h e p o t e n t i a l s a l e s volume o f t h e p l a n n e d c e n t r e ; and t h i r d , i n p l a n n i n g the p h y s i c a l f a c i l i t i e s The d e v e l o p e r ' s  t o f i t t h a t market p o t e n t i a l .  prime concern i n c o n t e m p l a t i n g t h e  development o f a r e g i o n a l shopping c e n t r e i s whether o r n o t i t w i l l be p r o f i t a b l e t o h i m .  To be p r o f i t a b l e , l e a s e revenues must  exceed development and o p e r a t i n g c o s t s by a s u f f i c i e n t m a r g i n . Normally,  development and o p e r a t i n g c o s t s can be  reasonably  a c c u r a t e l y d e t e r m i n e d , b u t l e a s e l e v e n u e s depend b a s i c a l l y on t h e t y p e s o f s t o r e s i n t h e c e n t r e , t h e i r number, t h e i r s i z e , and t h e i r a b i l i t y t o pay r e n t .  T h i s a b i l i t y t o pay r e n t u l t i m a t e l y depends  The word " t e n a n t " i s used o c c a s i o n a l l y i n t h i s t h e s i s as a s l a n g v e r b meant t o denote"occupy as a t e n a n t " o r "occupy w i t h tenants."  1  2 on t h e i r a b i l i t y t o p r o f i t i n t h i s c e n t r e , and h e a v i l y dependent on l o c a t i o n f a c t o r s . quately or improperly  that i n turn i s  I f the c e n t r e i s i n a d e -  matched to the r e t a i l  sales potential  e x i s t e n t f o r i t , the t e n a n t s w i l l not succeed ( o r some may and  the c o r r e s p o n d i n g i n a b i l i t y to pay  not)  r e n t w i l l a f f e c t the  d e v e l o p e r ' s revenues, p o s s i b l y t o the e x t e n t t h a t he w i l l little,  profit  or even l o s e , on the p r o j e c t . I t i s t h e r e f o r e b a s i c t h a t the d e v e l o p e r be  about c h o o s i n g a l o c a t i o n which has  concerned  s u f f i c i e n t sales potential  t o s u p p o r t the b u s i n e s s e s i n h i s c e n t r e .  However, even once  h a v i n g determined t h a t s u f f i c i e n t s a l e s p o t e n t i a l e x i s t s i n a r e g i o n f o r a r e g i o n a l shopping c e n t r e , the d e v e l o p e r has s o l v e d o n l y a p a r t of the problem. t a i l o r e d as to s i z e , n a t u r e ,  The  t e n a n t mix,  c e n t r e must then be and number of f u n c t i o n s ,  t o s u i t whatever s a l e s p o t e n t i a l e x i s t s and c h a r a c t e r i s t i c s of the p o t e n t i a l market  really  t o comply w i t h  the  area.  A l l of t h e s e problems are f u n c t i o n s of the l o c a t i o n of the c e n t r e , and  i n o r d e r f o r the d e v e l o p e r to be a b l e to a s s e s s  l o c a t i o n a l problems more a c c u r a t e l y , i t i s e s s e n t i a l t h a t b e t t e r t o o l s of l o c a t i o n a n a l y s i s be  developed.  I n r e c o g n i t i o n of t h i s need, over the y e a r s a g r e a t of r e s e a r c h  and p r a c t i c a l e x p e r i e n c e has been accumulated on  body the  m u l t i f a c e t e d problem of r e t a i l l o c a t i o n i n an attempt to b u i l d up a body of knowledge which c o u l d a i d those concerned w i t h l o c a t i o n problems to a r r i v e a t b e t t e r s o l u t i o n s .  Geographers, m a r k e t e r s ,  and p r a c t i t i o n e r s have w r i t t e n e x t e n s i v e l y on the s u b j e c t but  the  i n f o r m a t i o n i s s c a t t e r e d throughout a broad s e l e c t i o n of books and p e r i o d i c a l s .  I n many cases the l i t e r a t u r e f o c u s e s on d i f f e r e n t  3 a s p e c t s o f t h e problem o f r e t a i l l o c a t i o n .  I n some c a s e s , t h e  emphasis i s on d e s c r i b i n g complete t e c h n i q u e s f o r l o c a t i o n a n a l y s i s ; i n o t h e r s , t h e o r e t i c a l models o f fundamental r e l a t i o n s h i p s a r e developed;  and i n o t h e r s , f o r m a l r e s e a r c h i s conducted  on v e r y s p e c i f i c segments o f t h e whole problem i n an e f f o r t t o d e f i n e more a c c u r a t e l y t h e c r i t i c a l v a r i a b l e s and t h e i r complex interrelationships.  V a r i o u s models have been developed  which  p u r p o r t to d e s c r i b e those f a c t o r s which a r e c r i t i c a l i n t h e measurement o f a c e n t r e ' s drawing power.  Yet, other researchers  and p r a c t i t i o n e r s r e c o g n i z e t h a t t h e models a r e e i t h e r t o o simplified  o r a r e i n a d e q u a t e l y and i m p r o p e r l y q u a n t i f i e d because  t h e y do n o t g i v e r e c o g n i t i o n t o c e r t a i n v a r i a b l e s which r e s e a r c h and  e x p e r i e n c e have shown t o be i m p o r t a n t i n t h e p r o b l e m . As a r e s u l t , t h e t h e o r y o f r e t a i l l o c a t i o n i s somewhat  disjointed.  Methods o f l o c a t i o n a n a l y s i s d i f f e r , some  emphasizing  c e r t a i n b a s i c f a c t o r s and i g n o r i n g o t h e r s , and some v i c e v e r s a . Consequently,  many l o c a t i o n a n a l y s e s a r e conducted  by s e l e c t i n g  s e v e r a l methods, c a r r y i n g out t h e a n a l y s i s , and then t a k i n g a comp r o m i s e from each o f t h e d i f f e r e n t s o l u t i o n s p r o d u c e d .  I t i s felt  t h a t many o f t h e d i f f e r e n t methods a r e r e a l l y t r y i n g t o do t h e same t h i n g b u t no one method i s c o r r e c t , f o r each one f a i l s t o r e c o g n i z e c e r t a i n v a r i a b l e s which have an i m p o r t a n t b e a r i n g on t h e p r o b l e m , and each one s u f f e r s from a n e c e s s i t y to r e s o r t t o s u b j e c tive  reasoning. However, i t appears t h a t t h e r e h a s been no r e c e n t  to  a n a l y z e c r i t i c a l l y a l l t h e v a r i o u s arguments, c o n c e p t s ,  attempt factors,  and t e c h n i q u e s i n r e t a i l l o c a t i o n a n a l y s i s i n an e f f o r t t o p u l l them a l l t o g e t h e r and produce an improved, more comprehensive t o o l f o r a n a l y z i n g t h e complex problems f a c e d by t h e d e v e l o p e r ,  4 especially those pertaining to ascertaining the sales volume potential existent f o r a proposed centre.  This thesis i s p r i -  marily an attempt to examine that part of l o c a t i o n analysis which i s concerned with sales volume estimating.  It i s written with  the developer i n mind, something which most writings on r e t a i l l o c a t i o n analysis do not do.  A. large proportion of the l i t e r a -  ture i s written primarily from the r e t a i l e r ' s perspective  and  i s concerned with h i s problems i n l o c a t i o n analysis, but t y p i c a l l y , the developer faces a more d i f f i c u l t problem. l o c a t i o n analyses with a view to developing r e t a i l complex.  He must conduct  a successful t o t a l  In t h i s process, h i s problem i s f a r more complex  than that faced by the i n d i v i d u a l r e t a i l e r , f o r he normally has to anticipate the l o c a t i o n requirements of each of h i s future tenants i f he i s to have any assurance that each one w i l l  be  successful and thereby contribute to the centre's p r o f i t a b i l i t y . In summary, to cope adequately with the problem of r e t a i l l o c a t i o n , the developer requires two  things:  a thorough detailed  picture of the complexities and problems of sales volume estimating  i n r e t a i l l o c a t i o n analysis, and a broad, r e l i a b l e framework  within which to conduct such analysis. directed at these two  This thesis i s b a s i c a l l y  requirements. Purpose of the Study  It i s the purpose of t h i s thesis to examine that part of r e t a i l l o c a t i o n analysis which deals with the problem of sales volume estimating i n the planning of shopping centres i n order to attempt to i l l u s t r a t e the complex interdependancies  of the many  variables and present a more complete picture of a l l the factors involved.  The broad Intention i s to answer such questions  as:  what a r e t h e f a c t o r s Important  i n such a n a l y s i s , how a r e they  r e l a t e d , what methods a r e p r a c t i s e d , what models a r e o f f e r e d , and what a r e t h e i r l i m i t a t i o n s , p r o b l e m s , and I n a d e q u a c i e s . More s p e c i f i c a l l y , t h e t h e s i s w i l l : 1)  d i s c u s s t h e v a l i d i t y and l i m i t a t i o n s o f t h e many arguments, assumptions,  concepts, r e l a t i o n s h i p s , research f i n d i n g s ,  and f a c t o r s deemed t o be i m p o r t a n t f o r l o c a t i o n a l s a l e s volume a n a l y s e s ; 2)  d i s c u s s and a n a l y z e t h e v a r i o u s t e c h n i q u e s and e s p e c i a l l y the models employed i n shopping i n order t o :  a) determine  c e n t r e volume e s t i m a t i n g  how a d e q u a t e l y and t o what  e x t e n t they r e c o g n i z e and i n c o r p o r a t e t h e above f a c t o r s , and b) e v a l u a t e t h e i r a b i l i t y t o produce t h e o r e t i c a l l y sound, r e l i a b l e , a c c u r a t e p r e d i c t i o n s . 3)  Then, as t h e p r i m a r y o b j e c t i v e o f t h i s t h e s i s , t h e attempt w i l l be made t o s p e c i f y w h i c h o f t h e above f a c t o r s c o u l d be added t o , o r more e x p l i c i t l y r e c o g n i z e d i n , t h e models and t h e i r f o r m u l a e dictive  4)  t o improve t h e i r d e s c r i p t i v e and p r e -  capabilities.  P o i n t o u t where f u r t h e r r e s e a r c h i s r e q u i r e d t o r e f i n e t h e techniques of a n a l y s i s . Methodology o f t h e Study The t h e s i s w i l l be based p r i m a r i l y on a survey o f books  and p e r i o d i c a l a r t i c l e s d e a l i n g w i t h r e t a i l l o c a t i o n a n a l y s i s and shopping  c e n t r e s , supplemented t o a c e r t a i n e x t e n t by t h e  e x p e r i e n c e s o f a number o f p e o p l e a s s o c i a t e d w i t h t h e a u t h o r i n the r e a l e s t a t e development f i e l d .  6 O r g a n i z a t i o n o f t h e W r i t t e n Report The  study i s b a s i c a l l y o r g a n i z e d  one d e s c r i p t i v e and t h e o t h e r  i n t o two s e c t i o n s ,  analytical.  Chapter I I b r i e f l y r e v i e w s  t h e growth and development  of t h e shopping c e n t r e movement as a major f o r c e i n r e t a i l i n g patterns.  The importance o f l o c a t i o n i s then h i g h l i g h t e d ,  f o l l o w e d by a d i s c u s s i o n o f b o t h t h e n e c e s s i t y f o r l o c a t i o n r e s e a r c h and t h e growing i n t e r e s t i n l o c a t i o n r e s e a r c h as a means of i m p r o v i n g l o c a t i o n a l d e c i s i o n s . Chapter I I I i n t r o d u c e s t h e concept o f a c e n t r e ' s t r a d i n g a r e a from which t h e p o t e n t i a l customers f o r t h a t c e n t r e a r e drawn.  I t b e g i n s w i t h a statement about t h e b a s i c n o t i o n s  i n h e r e n t i n C e n t r a l Place theory which a r e h e l p f u l i n developing a p e r s p e c t i v e w i t h i n which t o v i e w market c e n t r e s and t h e i r of r e t a i l i n f l u e n c e as w e l l as t h e c a u s a l f a c t o r s l i m i t i n g influence. presented  area that  The importance o f the t r a d e a r e a concept i s then a l o n g w i t h a statement r e g a r d i n g t h e problems i n  measuring t h e p o t e n t i a l w h i c h t h e t r a d e a r e a r e p r e s e n t s .  It is  noted t h a t t r a d e a r e a d e l i n e a t i o n i n v o l v e s a s s e s s i n g how consumers w i l l r e a c t t o t h e v a r i o u s f a c t o r s and i n f l u e n c e s which a f f e c t consumer m o t i v a t i o n i n t h e s e l e c t i o n o f a p a r t i c u l a r r e t a i l  outlet.  The n o t i o n i s i n t r o d u c e d t h a t consumer patronage b e h a v i o u r i s governed by t h e consumer's p e r s p e c t i v e and r e a c t i o n t o c e r t a i n b e n e f i t - c o s t f a c t o r s , o r a t t r a c t i o n and r e s i s t a n c e f a c t o r s . I t i s these f a c t o r s which govern t h e e x t e n t o f a c e n t r e ' s  effective  drawing power. Chapter IV i s devoted t o the t a s k o f enumerating, e x a m i n i n g , and u n d e r s t a n d i n g  t h e v a r i o u s arguments, a s s u m p t i o n s ,  7 f a c t o r s and r e l a t i o n s h i p s suggested t o he v a l i d i n a d i s c u s s i o n o f the f a c t o r s which i n f l u e n c e consumer s p a t i a l b e h a v i o u r .  The  i n t e n t i o n i s t o d i s c u s s and p r e s e n t what a r e c o n s i d e r e d t o be t h e d e t e r m i n a n t s o f consumer p a t r o n a g e b e h a v i o u r so t h a t the t e c h n i q u e s o f volume e s t i m a t i n g can be e v a l u a t e d i n terms o f how a d e q u a t e l y they i n c o r p o r a t e such f a c t o r s i n t h e i r c o n c e p t u a l i zations. I n Chapter V the methods, and i n C h a p t e r VI t h e models employed i n measuring consumer p a t r o n a g e and p r e d i c t i n g p o t e n t i a l s a l e s volumes a r e p r e s e n t e d and e v a l u a t e d i n terms o f t h e i r conc e p t u a l s t r u c t u r e and t h e o r e t i c a l v a l i d i t y .  The i n t e n t i o n i s  t o d e t e r m i n e whether t h e y a r e c a p a b l e o f a c c u r a t e p r e d i c t i o n s . The problems and l i m i t a t i o n s o f each a r e c o n s i d e r e d , a f t e r which a t t e n t i o n i s t u r n e d t o examining the v a r i a b l e s and assumptions i n h e r e n t i n each.  The remainder o f the d i s c u s s i o n c o n s i d e r s the  r e a s o n s behind t h e i r observed i n a d e q u a c i e s and a t t e m p t s t o sugg e s t how  such i n a d e q u a c i e s might be  rectified.  The p r i m a r y f i n d i n g s o f t h e s t u d y a r e t h e n b r i e f l y summarized i n C h a p t e r V I I a l o n g w i t h s u g g e s t i o n s r e g a r d i n g t h e a r e a s which r e q u i r e f u r t h e r r e s e a r c h t o improve the d e s c r i p t i v e and p r e d i c t i v e c a p a b i l i t i e s o f the a n a l y t i c a l t e c h n i q u e s .  PART A  CONCEPTS AM) FACTORS I N LOCATION ANALYSIS  CHAPTER I I BACKGROUND AND The term  shopping  PERSPECTIVE  c e n t r e i s meant t o denote a planned  g r o u p i n g of r e t a i l f a c i l i t i e s , developed  as a u n i t , o f t e n l o c a t e d  i n a p e r i p h e r a l o r suburban l o c a t i o n as opposed t o the C e n t r a l B u s i n e s s D i s t r i c t (CBD).  I t n o r m a l l y p r o v i d e s a broad range of  i n t e g r a t e d s e r v i c e s and planned p a r k i n g f a c i l i t i e s .  This d e f i n i -  t i o n p l a c e s no l i m i t a t i o n on the s i z e o f the c e n t r e , but s t r e s s e s the importance  o f c o o r d i n a t e d p l a n n i n g i n the development of a  s i n g l e r e t a i l a g g l o m e r a t i o n , when compared w i t h the g r a d u a l development o f a m u l t i t u d e o f independant and u n r e l a t e d  retail  o u t l e t s over a number o f y e a r s . E v o l u t i o n o f the Shopping Centre Movement The planned phenomenon.  shopping  centre i s a f a i r l y  recent  A l t h o u g h t h e r e were a number o f such c e n t r e s i n  e x i s t e n c e i n the 1920's, i t i s o n l y w i t h i n the l a s t few decades t h a t shopping ing  patterns.  c e n t r e s have become a major f o r c e i n u r b a n r e t a i l The importance  and growth o f shopping c e n t r e s i n  the U n i t e d S t a t e s and Canada s i n c e World War the f o l l o w i n g  II i s reflected i n  statement:  "As o f J a n u a r y , 1965, the c o u n t r y had more than 8,000 such c e n t r e s , w i t h 158,000 s t o r e s d o i n g #54 B i l l i o n d o l l a r s a y e a r . T h i s r e p r e s e n t s about l / 5 t h o f t o t a l r e t a i l s a l e s . These shopping c e n t r e s p r o v i d e n e a r l y 8 m i l l i o n spaces for parking. 1  W. Applebaum, "Urban R e t a i l i n g , " i n Guide to S t o r e L o c a t i o n Research: W i t h S p e c i a l Emphasis on Supermarkets, ed. C. K o r n b l a u , Reading M a s s a c h u s e t t s , Addison-Wesley P u b l i s h i n g Co., 1968, p. 101.  9 By 1967,  the e s t i m a t e of the number of shopping  t o 10,000.  Furthermore,  i n the number of new  c e n t r e s had grown  and even more s t r i k i n g , the growth t r e n d  c e n t r e s appeared to be a c c e l e r a t i n g , w i t h  one p r o j e c t i o n e s t i m a t i n g growth would r e s u l t i n over 25,000 2 shopping  c e n t r e s of a l l k i n d s and s i z e s by  1977.  I n view of the r e l a t i v e l y r e c e n t emergence of the shopping  c e n t r e as a r e t a i l i n s t i t u t i o n , and i n view of the  a s t o n i s h i n g growth r a t e i n the number of such c e n t r e s , i t i s l i t t l e wonder t h a t r e t a i l e r s c o n s i d e r the shopping  c e n t r e move-  ment t o be the s i n g l e , most i m p o r t a n t development i n r e t a i l i n g in this  century. F i l l i n g a Need Planned  generated  shopping  by changing  c e n t r e s e v o l v e d to meet the needs  e n v i r o n m e n t a l f a c t o r s such as i n c r e a s i n g  u r b a n p o p u l a t i o n d e c e n t r a l i z a t i o n , i n c r e a s e d use of the a u t o m o b i l e , i n c r e a s e d c o n g e s t i o n i n the downtown c e n t r a l  business  d i s t r i c t of c i t i e s , the l a c k of adequate and c o n v e n i e n t p a r k i n g f a c i l i t i e s i n the c e n t r a l b u s i n e s s d i s t r i c t , and changed sumer b u y i n g  con-  behaviour.-^  Most shopping  c e n t r e s were b u i l t i n o u t l y i n g l o c a t i o n s  t o p r o f i t from the o p p o r t u n i t i e s a f f o r d e d by e x p l o d i n g p o p u l a t i o n growth.  F o l l o w i n g World War  I I , residential  c o n s t r u c t i o n i n the  "Decade o f O p p o r t u n i t y Seen f o r the Shopping Centre I n d u s t r y , " Chain S t o r e Age, J u l y , 1967, p. E 34.  d  - E. J . K e l l e y , Shopping C e n t r e s ; L o c a t i n g C o n t r o l l e d R e g i o n a l C e n t r e s , Saugatuck, C o n n e c t i c u t , The Eno F o u n d a t i o n f o r Highway T r a f f i c C o n t r o l , 1956, p. 2. /  10 suburbs a c c e l e r a t e d r a p i d l y as t h e number o f a v a i l a b l e v a c a n t home b u i l d i n g s i t e s d i m i n i s h e d r a p i d l y i n t h e c e n t r a l a r e a o f larger cities.  Because o f t h e g r e a t e r d i s t a n c e s e p a r a t i n g t h e  central business d i s t r i c t  from these consumers, and because o f  the i n c r e a s i n g use o f t h e a u t o m o b i l e and t h e r e l a t e d i n c r e a s e i n t r a f f i c c o n g e s t i o n , i t became i n c r e a s i n g l y d i f f i c u l t f o r these A  consumers t o r e a c h t h e downtown shopping c o r e .  The shopping  c e n t r e f l o u r i s h e d i n r e c o g n i t i o n o f the f a c t t h a t consumers i n the suburbs would, by c h o i c e , p r e f e r more c o n v e n i e n t l y l o c a t e d , 5  more e a s i l y a c c e s s i b l e f a c i l i t i e s c l o s e r t o home.  The new  shopping c e n t r e s i n these l o w d e n s i t y a r e a s were d e s i g n e d t o draw from t h e h i g h l y m o b i l e and w i d e l y d i s p e r s e d p o p u l a t i o n i n these new growth suburban communities.  Developers, recognizing  t h a t new s u b d i v i s i o n s were r a p i d l y expanding, and r e c o g n i z i n g t h a t these a r e a s would r e q u i r e new r e t a i l f a c i l i t i e s , planned t h e i r shopping c e n t r e s as scaled-down v e r s i o n s o f t h e downtown core:  t h a t i s , they r e c o g n i z e d t h e need f o r a broad range o f  s e r v i c e s analogous t o those a v a i l a b l e downtown, b u t on a s m a l l e r scale. A s i d e from t h e d e s i r e t o p r o f i t by d e v e l o p i n g f a c i l i t i e s i n a r e a s o f p o p u l a t i o n growth, a n o t h e r f a c t o r i n t h e d e c i s i o n t o l o c a t e i n o u t l y i n g a r e a s i n v o l v e d comparative s i t e c o s t s .  Close-  i n , p r o p e r l y zoned s i t e s were e x p e n s i v e and s c a r c e , and i t was o f t e n n e c e s s a r y t o u n d e r t a k e e x t e n s i v e and c o s t l y d e m o l i t i o n i n 4  I b i d . , p. 70.  5 R. N e l s o n , The S e l e c t i o n o f R e t a i l L o c a t i o n s , New York, F. W. Dodge Corp., 1956, p. 1 0 .  11 o r d e r t o o b t a i n a s i t e of s u f f i c i e n t s i z e . concentrated  Developers therefore  on o u t l y i n g l o c a t i o n s where v a c a n t l a n d was r e l a -  t i v e l y l e s s expensive and more abundant. R o l e of t h e A u t o m o b i l e The i n c r e a s i n g use of the a u t o m o b i l e i n the p o s t war e r a i s one o f t h e main reasons why shopping c e n t r e s have become so i m p o r t a n t .  Shopping c e n t r e s have brought goods and s e r v i c e s  to l o c a t i o n s g e o g r a p h i c a l l y convenient by a u t o m o b i l e .  t o consumers who can shop  The automobile enabled the consumer t o t r a v e l  greater distances w i t h l e s s expenditure  o f time and e f f o r t . ^  I t was no l o n g e r e s s e n t i a l t o p o s i t i o n r e t a i l f a c i l i t i e s w i t h i n w a l k i n g d i s t a n c e o f every p o p u l a t i o n c o n c e n t r a t i o n , n o r was i t e s s e n t i a l t h a t the f a c i l i t i e s be l o c a t e d on t r a i n o r bus r o u t e s . By the e a r l y 1960's the l a r g e m a j o r i t y o f f a m i l i e s i n North A m e r i c a owned c a r s , w i t h an i n c r e a s i n g number owning two c a r s . Shopping c e n t r e s c o u l d be reached more e a s i l y ; many of the neighbourhood s t r i p c e n t r e s and l o c a l shopping areas began t o l o s e out t o the c o m p e t i t i o n from the l a r g e r r e g i o n a l  centres  w h i c h were a b l e t o o f f e r a b r o a d e r range i n s e r v i c e s , s e l e c t i o n , p r i c e s , and q u a l i t y and hence the o p p o r t u n i t y f o r more  convenient  one-stop shopping; the- consumer c o u l d purchase most o f h i s r e q u i r e ments i n one t r i p a t one l o c a t i o n and do so i n more modern t i e s , with better parking, better a c c e s s i b i l i t y , l e s s t h a n downtown, and e s s e n t i a l l y , more c o n v e n i e n c e .  facili-  congestion  Modern  expressways and freeways p e r m i t t e d r a p i d t r a n s p o r t a t i o n a c r o s s  K e l l e y , op. c i t . , p. 50.  12 broad g e o g r a p h i c a l a r e a s , and c e n t r e s l o c a t e d a t the freeway i n t e r c h a n g e s c o u l d a t t r a c t consumers from d i s t a n t p o i n t s owing to  t h e ease o f a c c e s s i b i l i t y a f f o r d e d by t h e freeway. E f f e c t on CBD R e t a i l i n g R e t a i l i n g i n t h e downtown r e t a i l a r e a was a d v e r s e l y  a f f e c t e d by t h e s e changes i n t r a n s p o r t a t i o n p a t t e r n s , r e s i d e n t i a l 7 t r e n d s , and s h i f t s i n consumer b u y i n g h a b i t s . The c e n t r a l b u s i n e s s d i s t r i c t l o s t ground s t e a d i l y t o t h e new r e t a i l i n g 8 f a c i l i t i e s i n outlying d i s t r i c t s .  Inadequate and e x p e n s i v e  p a r k i n g downtown, s e v e r e t r a f f i c c o n g e s t i o n , r e s t r i c t e d  accessi-  b i l i t y , poor p u b l i c t r a n s p o r t a t i o n , antiquated b u i l d i n g s , poor r e t a i l p r o m o t i o n , and slum c o n d i t i o n s around the c e n t r a l all  c o n t r i b u t e d t o t h e d e c l i n e o f t h e downtown r e t a i l  Some o f t h e c e n t r a l b u s i n e s s d i s t r i c t s  have s u f f e r e d even a b s o l u t e s a l e s d e c l i n e s .  to  Others  While the c e n t r a l  i n t h e l a r g e m e t r o p o l i t a n a r e a i s n o t doomed  e x t i n c t i o n , the prospects are not encouraging.  tailers  core.  have managed t o i n c r e a s e  t h e i r absolute sales while l o s i n g r e l a t i v e p o s i t i o n . 9  business d i s t r i c t  area  Downtown r e -  have been f o r c e d t o d r a s t i c a l l y a l t e r t h e i r p r o d u c t m i x ,  s t o r e h o u r s , p a r k i n g f a c i l i t i e s , p r o m o t i o n a l e f f o r t s , and so on, i n t h e attempt  t o h o l d on t o a s i z a b l e share o f t h e market.  Y e t many major r e t a i l  i n t e r e s t s , such as department  s t o r e s , even though they c o n t i n u e d t o a e h i e v e s a t i s f a c t o r y s a l e s Applebaum, "Urban R e t a i l i n g , " i n K o r n b l a u , op. c l t . , p. 104. Ibid. Ibid.  volumes downtown, r e c o g n i z e d the o p p o r t u n i t i e s opening up i n the suburbs.  They found i t p r o f i t a b l e , and o f t e n n e c e s s a r y  r e a l i g n themselves to  i n these suburban communities, i n the  a t t r a c t those new  of r e t a i l  Shopping Centre  of c h a r a c t e r i s t i c f e a t u r e s : planned l a n d s c a p i n g ; c i v i c  establishments.  Characteristics  The modern r e g i o n a l shopping  c e n t r e e x h i b i t s a number  an appearance of o v e r a l l u n i t y ;  and c u l t u r a l f a c i l i t i e s ; an extended  drawing power; scaled-down d u p l i c a t i o n o f the shopping  ing  attempt  consumers by o f f e r i n g modern, e f f i c i e n t ,  c o n v e n i e n t , planned g r o u p i n g s  o f downtown r e t a i l  to  facilities  a r e a s , w i t h a minimum of o v e r l a p p i n g , employ-  the i d e a of one-stop shopping;  the b e s t f a c i l i t i e s i n the  m e t r o p o l i t a n a r e a f o r p a r k i n g ; planned  a l l e v i a t i o n of  traffic  c o n g e s t i o n problems; and the w i d e s t v a r i e t y and s e l e c t i o n of merchandise and s e r v i c e s o u t s i d e the downtown r e t a i l  area.  T y p i c a l l y the l a n d and b u i l d i n g s are owned by the d e v e l o p e r the f a c i l i t i e s are l e a s e d t o d i f f e r e n t r e t a i l e r s .  The  and  developer  i s a b l e to c o n t r o l a r c h i t e c t u r a l d e s i g n f e a t u r e s , p a r k i n g , and tenant types.  An assortment  of d i f f e r e n t o u t l e t s o f f e r i n g a  b a l a n c e d r e p r e s e n t a t i o n of goods and s e r v i c e s i s f e a t u r e d . shopping  c e n t r e i s planned  The  i n advance t o be an i n t e g r a t e d  harmonious u n i t . The v e r y l a r g e c e n t r e s have one o r more department s t o r e s , a number o f v a r i e t y s t o r e s , a number of a p p a r e l s t o r e s , o t h e r s p e c i a l t y s t o r e s , and a complete range o f p e r s o n a l s e r v i c e s and convenience  I b i d . , p.  101.  goods.  1 0  14 Shopping c e n t r e d e v e l o p e r s  t r y to a t t r a c t the  t e n a n t s i n terms of p r o f i t a b i l i t y , m e r c h a n d i s i n g rating.  powerful  s k i l l s , and  I n l a r g e c e n t r e s , department s t o r e s , which are the  n i z e d l e a d e r s i n merchandising tenants.  best credit recog-  e x p e r t i s e , a r e a p r e r e q u i s i t e as  The department s t o r e and the supermarket, w i t h t h e i r 11 a d v e r t i s i n g programs, draw customers t o the c e n t r e .  Consequently these s t o r e s demand the most advantageous l o c a t i o n s w i t h i n the c e n t r e and more f a v o u r a b l e r e n t a l terms. s t o r e s b e n e f i t from the t r a f f i c generated but pay h i g h e r r e n t a l charges,  The  smaller  by the l a r g e r s t o r e s  i n most c a s e s , department s t o r e s  a r e g i v e n c o n c e s s i o n s i n the r e n t a l charge t o e n t i c e them i n t o the c e n t r e , p r o v i d i n g the c e n t r e w i t h i t s major r e t a i l magnet. The modern shopping  c e n t r e i s not u n l i k e the a n c i e n t  market p l a c e s through h i s t o r y , i n the sense t h a t such market p l a c e s not o n l y served as l o c a l p o i n t s f o r economic t r a d e , but a l s o served as c e n t r e s f o r c i v i c , p o l i t i c a l , and e n t e r t a i n m e n t 12 activities.  I n t h i s same sense, the modern shopping  can serve n o t o n l y as a c e n t r e f o r m e r c h a n d i s i n g ,  centre  but as a  community c e n t r e f o r s o c i a l , c u l t u r a l , and r e c r e a t i o n a l a c t i v i t i e s , all  of which enhance i t s power to a t t r a c t p a t r o n a g e .  t h e a t r e s , e x h i b i t i o n h a l l s , r e s t a u r a n t s , and  Civic clubs,  children's a c t i v i t i e s  a l l s e r v e as a m e n i t i e s t o customers on a shopping  trip,  thereby  i n c r e a s i n g the a t t r a c t i v e power of the c e n t r e by making i t a more a t t r a c t i v e , e n j o y a b l e p l a c e t o v i s i t . I b i d . , p.  102.  N e l s o n , op. c l t . , p.  4.  This s o c i a l  aspect  15 a l o n g w i t h the more f a m i l i a r economic one  can r e s u l t i n the  shopping c e n t r e becoming the m e e t i n g p l a c e f o r the r e g i o n . I n summary, shopping c e n t r e s are becoming e v e r more important  i n the urban r e t a i l i n g p a t t e r n .  growth r a t e f o r new and p r e s e n t  As mentioned, the  shopping c e n t r e development i s h i g h ,  i n d i c a t i o n s p o i n t t o a c o n t i n u a t i o n of the  So l o n g as new  trend.  r e s i d e n t i a l a r e a s are b u i l t and o c c u p i e d ,  and  so  l o n g as e x i s t i n g r e t a i l f a c i l i t i e s become o b s o l e t e o r i n a d e q u a t e , new  f a c i l i t i e s w i l l be developed t o s e r v i c e new 13  old  facilities.  replace  But the days of easy s u c c e s s i n shopping  c e n t r e development are o v e r .  More s t r i n g e n t governmental r e -  quirements w i l l have t o be met w i l l be g r a n t e d .  a r e a s and  b e f o r e the n e c e s s a r y  I n c r e a s i n g c o m p e t i t i o n f o r new  approvals  shopping  s i t e s w i l l n e c e s s i t a t e b e t t e r p r e l i m i n a r y r e s e a r c h and  centre  planning  t o ensure t h a t proposed shopping c e n t r e s become s u c c e s s f u l operations. Importance of L o c a t i o n Generally  speaking,  shopping c e n t r e s have proved t o be  highly successful e n t i t i e s .  But to assume t h a t each new  shopping c e n t r e w i l l a c h i e v e  s u c c e s s i s t o i g n o r e the f a c t t h a t  t h e i r s u c c e s s depends upon whether o r not they s a t i s f y essential prerequisite:  proposed  an  does a need e x i s t f o r t h a t c e n t r e i n  the urban r e t a i l s p a t i a l s t r u c t u r e ?  i n o t h e r words, s u c c e s s i s  dependent upon whether a genuine need e x i s t s f o r a d d i t i o n a l r e t a i l f a c i l i t i e s i n the v i c i n i t y of the proposed l o c a t i o n f o r the new  centre.  Applebaum, "Urban R e t a i l i n g , " i n K o r n b l a u ,  op. c i t . , p.  102.  16 The d e v e l o p e r needs t o s e a r c h out the l o c a t i o n w i t h the b e s t s a l e s volume p o t e n t i a l f o r t h e c l a s s o f shopping he i n t e n d s t o b u i l d .  centre  Today's mass r e t a i l i n g demands a l a r g e  i n v e s t m e n t i n s t o r e f a c i l i t i e s and r e q u i r e s both the d e v e l o p e r and the r e t a i l e r t o commit themselves period of time.  to a l o c a t i o n f o r a l o n g  M i s t a k e s i n c e n t r e s i t e l o c a t i o n , and  mistakes  i n s i g n i n g up as a t e n a n t i n p o o r l y l o c a t e d c e n t r e s can have s e r i o u s consequences f o r d e v e l o p e r s and r e t a i l e r s . o f t e n the o v e r - r i d i n g f a c t o r g o v e r n i n g s u c c e s s . merchant may  Location i s  Even a p o o r  be a b l e t o overcome h i s l a c k o f m e r c h a n d i s i n g  c a p a b i l i t y through the v e h i c l e o f a good l o c a t i o n . W h i l e a good l o c a t i o n does n o t ensure a p r o f i t a b l e o p e r a t i o n , i t i s an i n d i s p e n s a b l e s t a r t i n g p o i n t i n the l i f e a shopping  c e n t r e , and i f over a p e r i o d o f time a l o c a t i o n  of be-  comes an u n s u i t a b l e one, o n l y an expensive and s t r e n u o u s l y sustained merchandising  e f f o r t w i l l n u l l i f y the p o s i t i o n a l d i s 14  advantage and b u i l d a s a t i s f a c t o r y r e t u r n f o r the c e n t r e . Of c o u r s e , even w i t h a good l o c a t i o n , p r o f i t s w i l l n o t maximized u n l e s s l o c a t i o n a n a l y s i s i s undertaken how  be  to a s c e r t a i n  the r e t a i l e r can b e s t t a i l o r h i s m e r c h a n d i s i n g p o l i c i e s t o  conform t o the c h a r a c t e r i s t i c s o f the t r a d e a r e a b e i n g s e r v e d . The d e v e l o p e r must f o l l o w c e r t a i n p r o c e d u r e s  of s i t e  s e l e c t i o n and b u s i n e s s volume e s t i m a t i o n i f he i s t o a s s u r e the success of h i s c e n t r e .  He may  a n o t h e r , o r the e s t i m a t e s may  choose one s i t e i n s t e a d o f h e l p him i n d e t e r m i n i n g the  c h a r a c t e r and type o f b u i l d i n g t o c o n s t r u c t .  New  B. J . Kane, A S y s t e m a t i c Guide t o Supermarket L o c a t i o n A n a l y s i s , York, P a i r c h i l d P u b l i c a t i o n s , 1966, p. v.  17 Importance o f L o c a t i o n i n t h e Choice o f Tenant Types In  o r d e r t o ensure t h a t a shopping  c e n t r e w i l l be a  p r o f i t a b l e development, t h e d e v e l o p e r must be aware o f t h e l o c a t i o n p o t e n t i a l which e x i s t s f o r each o f h i s t e n a n t s .  In the  end, he i s f a c e d w i t h t h e n e c e s s i t y o f r e n t i n g t h e p r o p e r t y o r s t o r e space t o a t e n a n t .  The l a n d l o r d w i s h e s , o f c o u r s e , t o  s e l e c t a r e t a i l e r who w i l l be s u c c e s s f u l . Whether, f o r example, he chooses a shoe s t o r e o r a c h i l d r e n ' s wear shop depends, t h e r e f o r e , upon t h e b u s i n e s s volume which these two p o s s i b l e t e n a n t s might have and t h e p e r c e n t a g e  o f g r o s s s a l e payments he  can o b t a i n s i n c e many l e a s e s r e q u i r e a t e n a n t t o pay a percentage 15 o f s a l e s as r e n t .  The h i g h e r t h e b u s i n e s s volume o f t h e t e n a n t ,  the more r e n t he w i l l p a y , and t h e b e t t e r t h e p r o f i t a b i l i t y o f the shopping  c e n t r e as a whole.  O b v i o u s l y , t o make t h e b e s t  c h o i c e i n t e n a n t t y p e s r e q u i r e s comprehensive l o c a t i o n a n a l y s i s to  a s c e r t a i n which t e n a n t s have t h e g r e a t e s t p o t e n t i a l volume i n  the t r a d e a r e a .  I f such l o c a t i o n r e s e a r c h i s n o t conducted, t h e  p r o b a b i l i t y Increases of having marginal tenancies, o r o u t r i g h t f a i l u r e s , which reduce h i s r e t u r n s u b s t a n t i a l l y . l e s s than optimum c h o i c e o f tenancy  Furthermore,  a  t y p e s can l i m i t t h e p a t r o n a g e  drawn t o t h e o t h e r e s t a b l i s h m e n t s a t t h e l o c a t i o n ,  thereby  c r e a t i n g l e s s than a maximum b u s i n e s s volume f o r t h e c e n t r e as a whole.  I f t h e d e v e l o p e r i s t o have assurance  t h a t l e a s e revenues  w i l l be m a i n t a i n e d , he must have p r i o r assurance  that s u f f i c i e n t  s a l e s volume p o t e n t i a l e x i s t s t o enable t h e t e n a n t t o a c h i e v e s a t i s f a c t o r y s a l e s l e v e l s and a f f o r d t h e r e n t a l charge. K e l s o n , op. c i t . , p. 1 4 3 .  I f the  18 location decision i sl e f t s t r i c t l y  to the tenant,  and i f t h e  t e n a n t m i s c a l c u l a t e s t h e l o c a t i o n p o t e n t i a l f o r h i s type o f s t o r e , he may f a i l and t h e c o r r e s p o n d i n g i n a b i l i t y t o pay r e n t w i l l a f f e c t the d e v e l o p e r ' s revenues p o s s i b l y t o t h e e x t e n t t h a t he w i l l s u f f e r l o s s e s on h i s i n v e s t m e n t .  I t i s therefore basic that the developer  be concerned about f i r s t c h o o s i n g a c e n t r e l o c a t i o n w i t h  sufficient  s a l e s p o t e n t i a l f o r t h e b u s i n e s s e s i n h i s c e n t r e , and then s e c o n d , e s t a b l i s h i n g some g u i d e l i n e s as t o t h e number, s i z e , and t y p e s o f s t o r e s which w i l l o p t i m a l l y f i t t h e market p o t e n t i a l e x i s t e n t f o r the  centre. I n c r e a s i n g Importance o f L o c a t i o n The  maturity.  shopping c e n t r e i n d u s t r y has reached a l e v e l o f  Some a r e a s a r e " o v e r - s t o r e d ; "  i n many cases c o n s t r u c t i o n  of new c e n t r e s out-paces p o p u l a t i o n g r o w t h ; a c o n s i d e r a b l e number of c e n t r e s f a l l  s h o r t o f a n t i c i p a t e d s a l e s ; and b o t h new and  e x i s t i n g centres are confronted The  w i t h more and s h a r p e r  days o f wide-open o p p o r t u n i t y  are gone.  competition.  f o r shopping c e n t r e development  T h i s does n o t n e c e s s a r i l y mean t h a t t h e r a t e o f new  development w i l l slow down.  The c o n t i n u i n g growth and s h i f t s i n  p o p u l a t i o n , i n c r e a s i n g consumer p u r c h a s i n g of o l d e r c e n t r e s w i l l c o n t i n u e p i n g c e n t r e development.  power, and o b s o l e s c e n c e  t o c r e a t e o p p o r t u n i t i e s f o r shop-  I t does mean, however, t h a t t h e s e l e c -  t i o n and e v a l u a t i o n o f l o c a t i o n s has become much more d i f f i c u l t and  critical.  I n c r e a s i n g l y , i n order to avoid serious mistakes  and  improve t h e p r o b a b i l i t y o f s u c c e s s ,  i t w i l l become n e c e s s a r y  t o f u r t h e r r e f i n e t h e t e c h n i q u e s o f l o c a t i o n assessment, and a  P P l y b e t t e r l o c a t i o n r e s e a r c h p r o c e d u r e s t o such management  * Term used by Ipplebaum meaning "too many s t o r e s . "  19 d e c i s i o n s a s : where t o l o c a t e new c e n t r e s ; whether t o e n l a r g e o r r e h a b i l i t a t e e x i s t i n g c e n t r e s ; and what type o f c e n t r e should he b u i l t i n a p a r t i c u l a r l o c a t i o n . I n t h e p a s t , r e t a i l e r s and d e v e l o p e r s have o f t e n s e l e c t e d l o c a t i o n s on an o p p o r t u n i s t i c and haphazard b a s i s , w h i c h sometimes r e s u l t s i n unprofitable ventures.  However, some d e v e l o p e r s and  r e t a i l e r s a r e s t r i v i n g t o develop b e t t e r l o c a t i o n assessment techniques.  W h i l e they do n o t expect p e r f e c t s c i e n t i f i c  accuracy,  they do hope t h a t , w i t h t h e h e l p o f r e s e a r c h , s e r i o u s m i s t a k e s may be avoided and t h e p r o b a b i l i t y o f success  correspondingly  improved. L o c a t i o n Research  - H i s t o r y , S t a t u s , and P r o s p e c t s  The magnitude o f t h e i n v e s t m e n t  i n a r e g i o n a l shopping  c e n t r e r e q u i r e s a g r e a t d e a l o f study about many market and financial factors.  The s i t e chosen, i t s a c c e s s i b i l i t y t o t h e  p o t e n t i a l t r a d e a r e a , t h e s t o r e t e n a n t mix, and t h e c o l l e c t i v e management o f t h e e n t i r e complex determine  n o t o n l y t h e success  o f t h e t o t a l v e n t u r e b u t a l s o t o a v e r y l a r g e e x t e n t t h e success which each i n d i v i d u a l s t o r e e n j o y s . Centres which a r e n o t s u c c e s s f u l u s u a l l y d i s p l a y one o r more o f t h e f o l l o w i n g  shortcomings:  1)  poor s i t e l o c a t i o n as a r e s u l t o f poor l o c a t i o n  analysis;  2)  poor design - e i t h e r the s i z e of the centre i s improperly r e l a t e d t o t h e volume p o t e n t i a l e x i s t e n t i n t h e t r a d e a r e a , o r the s t o r e s i n t h e c e n t r e a r e i m p r o p e r l y p o s i t i o n e d r e s u l t i n g i n poor l i n k a g e s and t r a f f i c between s t o r e s , o r the a r c h i t e c t u r a l f e a t u r e s a r e i n c o n v e n i e n t and u n a t t r a c t i v e ;  20 3)  p o o r l e a s i n g and t e n a n t s e l e c t i o n - e i t h e r the t e n a n t s are i n a d e q u a t e l y b a l a n c e d , o r they are not p r o p e r l y s e l e c t e d t o match the t r a d e a r e a , o r t h e r e i s an e x c e s s i v e d u p l i c a t i o n 16 of f u n c t i o n ;  4)  t e n a n t s cannot a f f o r d t o pay a h i g h e r r e n t because t h e i r volume i s too l o w , meaning t h a t the c e n t r e does not an adequate income from these t e n a n t s , and  realize  consequently  s u f f e r s from a r e d u c t i o n i n p r o f i t s . P r o p e r economic study i n advance may  have avoided these problems  of poor s i t e s e l e c t i o n , p o o r d e s i g n , and poor l e a s i n g and selection.  tenant  U s u a l l y the c o s t of the i n i t i a l l o c a t i o n a n a l y s i s i s  i n f i n t e s i m a l i n comparison w i t h the b e n e f i t s o r s a v i n g s t h a t can 17 be d e r i v e d from i t over the l i f e o f the  investment.  The need t o e s t i m a t e r e t a i l s a l e s p o t e n t i a l s , so t h a t r e t a i l f a c i l i t i e s can be s c a l e d p r o p o r t i o n a t e l y to these s a l e s potentials, i s universal.  T h i s i s e s p e c i a l l y t r u e i f the o b j e c -  t i v e i s t o p r o v i d e adequate r e t a i l f a c i l i t i e s t o the consumer w i t h o u t the economic waste produced by o v e r - b u i l d i n g i n the market o r mismatching the f a c i l i t i e s t o t h a t market. Development of L o c a t i o n Research S y s t e m a t i c l o c a t i o n r e s e a r c h s t a r t e d s e v e r a l decades 18 ago.  At f i r s t ,  i n t e r e s t was v e r y l i m i t e d and knowledge  s p a r c e , but i n r e c e n t y e a r s , r e t a i l e r s , w h o l e s a l e r s , and 1 6  I b i d . * P.  324.  1 7  I b i d - . P.  142.  18  Applebaum, " S t o r e L o c a t i o n Research i n K o r n b l a u , op. c i t . , p. 3.  was shopping  - A r t or Science?"  21 centre developers research.  have shown I n c r e a s i n g i n t e r e s t i n l o c a t i o n  Indeed, they have r e a l i z e d t h a t i n o r d e r to s u r v i v e ,  o r a t l e a s t to p r o f i t , they must pay locational  considerable  a t t e n t i o n to  considerations.  L o c a t i o n e v a l u a t i o n i s complex; t h e r e i s no magic f o r m u l a , nor i s t h e r e any ment.  simple  s u b s t i t u t e f o r informed  judg-  But a t the same t i m e , i n f o r m e d judgment on m a t t e r s of  l o c a t i o n r e q u i r e s f a c t u a l i n f o r m a t i o n and  a thorough g r o u n d i n g  i n l o c a t i o n a l c r i t e r i a - i n b r i e f , i t requires l o c a t i o n research. I n the e a r l i e r c e n t r e s , the d e v e l o p e r s k n o w i n g l y any  did not  use  of the body of l o c a t i o n t h e o r y a v a i l a b l e .  d i d most o f them use  the e a r l y models d e s c r i b e d  Neither  i n Chapter VI  of  t h i s t h e s i s , nor d i d they n e c e s s a r i l y f e e l t h a t such p r o c e d u r e s would produce a b e t t e r d e c i s i o n . f e l t t h a t l o c a t i o n r e s e a r c h was own  r e t a i l i n g experience  Many of them u n d o u b t a b l y an i n f a n t s c i e n c e , and  that their  and i n t u i t i o n would serve as a b e t t e r  judgment t o o l than l o c a t i o n r e s e a r c h as i t stood a t t h a t  time.  Indeed, they seemed to share an o p i n i o n t h a t s e l e c t i n g a s u i t a b l e t r a c t f o r development depended more on e x p e r i e n c e of t h e o r i e s or f o r m u l a e s .  than on the  E s s e n t i a l l y these e a r l y p r a c t i t i o n e r s  employed t o o l s w h i c h were t h e o r e t i c a l I n f o u n d a t i o n were not  use  although  they  c o n s c i o u s l y aware of i t . The  e a r l i e s t attempts to employ " r e s e a r c h " i n e v a l u a t i n g  s i t e s date back to about the b e g i n n i n g  of the c e n t u r y .  These  a t t e m p t s , made on b e h a l f of r e t a i l c h a i n s t o r e s , t r i e d t o d e t e r mine the r e l a t i v e v a l u e of a p a r t i c u l a r s i t e compared to  K e l l e y , op. c l t . , p.  13.  other  22 20  s i t e s i n the same b u s i n e s s a r e a .  They c e n t r e d on the volume,  c o m p o s i t i o n , and q u a l i t y of p e d e s t r i a n t r a f f i c , and the hood o f c o n v e r t i n g most of t h i s t r a f f i c i n t o s t o r e The n e x t advance i n l o c a t i o n r e s e a r c h was about 1930  likeli-  customers. initiated  by g r o c e r y c h a i n s t o r e s , and f o c u s e d on s t u d i e s of  s t o r e t r a d e areas and on the market share which a s t o r e secured from i t s t r a d e a r e a .  I n the e f f o r t t o understand  these phenomena  a v a i l a b l e c o n c e p t u a l m a t e r i a l s were drawn from v a r i o u s d i s c i p l i n e i n c l u d i n g m a r k e t i n g geography, b e h a v i o u r a l s c i e n c e , s t a t i s t i c s 21  and  economics. The t h i r d advance i n l o c a t i o n r e s e a r c h c o i n c i d e d w i t h  the s p e c t a c u l a r development of planned World War  II.  shopping  centres a f t e r  The i n v e s t o r s i n these expensive r e a l e s t a t e p r o -  j e c t s r e c o g n i z e d the need f o r the r e s e a r c h t o support and plement b u s i n e s s i n t u i t i o n .  sup-  I n a d d i t i o n , the l a r g e r f i n a n c i a l  i n s t i t u t i o n s demanded more f a c t u a l i n f o r m a t i o n on which to base d e c i s i o n s r e g a r d i n g the soundness of t h e i r i n v e s t m e n t .  Finally,  many p r o s p e c t i v e t e n a n t s r e c o g n i z e d t h a t l o c a t i o n s t u d i e s were e s s e n t i a l i n p r o j e c t i n g the p o t e n t i a l f o r them i n a g i v e n c e n t r e . L o c a t i o n Research - P r e s e n t S t a t u s The t h i r d stage i n l o c a t i o n r e s e a r c h has produced by f a r the g r e a t e s t advances i n t h e o r i z i n g , model b u i l d i n g , and manipul a t i n g s t a t i s t i c a l data i n a r r i v i n g at projected sales p o t e n t i a l s  Applebaum, " S t o r e L o c a t i o n Research K o r n b l a u , op. c i t . , p. 3. 21  ^ 2 2  Ibid. I b i d . , p.  4.  - A r t or Science?" i n  23 for  a t o t a l complex of r e t a i l o u t l e t s i n a shopping  centre.  These advances have been welcomed by development f i r m s who duct research  e i t h e r through t h e i r own  of c o n s u l t i n g f i r m s who  s t a f f s or w i t h the  conhelp  s p e c i a l i z e i n l o c a t i o n research.  B a s i c a l l y , commercial f i r m s expect two t i o n research:  23  t h i n g s of l o c a -  1) they want e v a l u a t i o n of s p e c i f i c s i t e s t o  determine p o t e n t i a l s a l e s and  the p r o b a b i l i t y of s u c c e s s a t t h e s e  s i t e s , and  they want e s t i m a t e s  t h a t are w i t h i n a r e a s o n a b l e range  of e r r o r .  2) What i s more d i f f i c u l t ,  they want to s e l e c t , from  among the many a l t e r n a t i v e l o c a t i o n p o s s i b i l i t i e s i n a m e t r o p o l i t a n a r e a or a l a r g e r g e o g r a p h i c r e g i o n , those l o c a t i o n s which w i l l produce an optimum share of the market p o t e n t i a l , a minimum h a z a r d of f u t u r e s a l e s e r o s i o n , and 24 over the l o n g  a maximum r e t u r n on t o t a l i n v e s t m e n t  run.  Location research  involves prediction.  To c o n s i s t e n t l y  p r e d i c t w i t h a r e a s o n a b l e degree of a c c u r a c y , t h e r e must be scientific basis.  Therefore,  a c c u r a c y of p r e d i c t i o n w i l l depend  on the body of s c i e n t i f i c knowledge a v a i l a b l e on the s u b j e c t the way  i n w h i c h t h a t s c i e n t i f i c knowledge i s o r g a n i z e d  methodological  a  framework capable of b e i n g  and  into a  applied c o n s i s t e n t l y .  I n s m a l l e r companies, the e v a l u a t i o n of a l o c a t i o n i s o f t e n h a n d l e d by one man,  whereas i n l a r g e r companies i t tends  t o be a group r e s p o n s i b i l i t y . side consultants  Ibid. 2 4  Ibid.  The  v e r y l a r g e companies use  out-  to supplement the r e s e a r c h done w i t h i n the f i r m .  24 25  In a study conducted i n 1963,  W i l l i a m Applebaum f o u n d  the r e t a i l l o c a t i o n e f f o r t made by l a r g e r e t a i l e r s ,  that  compared  w i t h t h e magnitude o f t h e investment and r i s k i n new r e t a i l developments, was v e r y modest and o f t e n o n l y a p a r t time j o b . Few f i r m s employed s o p h i s t i c a t e d comprehensive s t u d i e s . f i r m s considered  o n l y c e r t a i n f a c t o r s such as p o p u l a t i o n  ( c h a r a c t e r i s t i c s and income), c o m p e t i t i o n , economic a s p e c t s o f t h e a r e a , r e t a i l of e x i s t i n g shopping c e n t r e s . ferences  Most  automobile  traffic,  s a l e s , and t h e o c c u r r e n c e  Few f i r m s s t u d i e d consumer p r e -  and shopping p a t t e r n s .  Few f i r m s c o m p r e h e n s i v e l y s t u d i e d  a whole a r e a t o determine where t h e most p r o m i s i n g l o c a t e d , p r e f e r r i n g instead to evaluate  s i t e s were  single s i t e s without r e -  gard f o r whether o r n o t t h i s s i t e was s u p e r i o r t o o t h e r a v a i l a b l e alternative sites.  A l t h o u g h most f i r m s made s a l e s p r o j e c t i o n s  beyond opening d a t e , few p r o j e c t i o n s were f o r more than one y e a r a f t e r opening. follow-up  Only a m i n o r i t y o f t h e f i r m s q u e s t i o n e d made a  study t o determine t h e r e a s o n s f o r d i s c r e p a n c i e s  a c t u a l s a l e s and e s t i m a t e d ,  predicted sales.  have o n l y l i m i t e d knowledge o f t h e p u b l i s h e d t i o n research  between  Many o f t h e companies information  on l o c a -  techniques.  However, t h e r e i s a g r e a t and growing i n t e r e s t i n r e t a i l l o c a t i o n research  and widespread r e c o g n i t i o n o f t h e need f o r more  d e f i n i t i v e t e c h n i q u e s and b e t t e r i n f o r m e d a n a l y s t s . s t a f f s have emerged, o u t s i d e c o n s u l t a n t s b e t t e r techniques are developing  Qualified  a r e a v a i l a b l e , and  i n answer t o t h e need.  ? Applebaum, "Survey o f S t o r e L o c a t i o n Research by R e t a i l C h a i n s , " i n K o r n b l a u , op. c i t . , pp. 7-8. d  25  L o c a t i o n r e s e a r c h i s many t h i n g s t o many p e o p l e .  I n the  u n i v e r s i t i e s and t h e j o u r n a l s , i t i s a s e r i o u s p r o f e s s i o n a l conc e r n w i t h p r i n c i p l e s , d e f i n i t i o n s , a n a l y s e s , models and methods. W i t h a l i m i t e d number o f r e s e a r c h  c o n s u l t a n t s , an e q u a l l y s e r i o u s ,  t h o r o u g h , p r o f e s s i o n a l approach i s t h e r u l e , a l t h o u g h  there are  some who charge c o n s i d e r a b l e f e e s f o r u n s u b s t a n t i a t e d  guesswork  presented  under t h e name o f " r e s e a r c h . "  The wide range i n q u a l i t y  grades i n l o c a t i o n r e s e a r c h i s a l s o e v i d e n t i n t h e c o n t r i b u t i o n s made by s c h o l a r s o f economies, geography, m a r k e t i n g geography, s o c i o l o g y , and p l a n n i n g .  Some c o n t r i b u t i o n s a r e r i g o r o u s l y con-  c e i v e d and t e s t e d and a r e s o p h i s t i c a t e d a d d i t i o n s t o knowledge. 26  Others d i s p l a y l i t t l e  substance.  G e n e r a l l y , t h e c a l i b r e o f most c u r r e n t l o c a t i o n r e s e a r c h r e p o r t s w r i t t e n f o r i n d u s t r y by c o n s u l t a n t s o r f i r m s do n o t r e f l e c t t h e l e v e l o f knowledge i n t h e l i t e r a t u r e .  A. g r e a t  deal  27  more i s known than i s e v i d e n c e d .  There i s a heavy r e l i a n c e on  the f o r m a t f o l l o w e d , and i n many c a s e s , r e p o r t s from t h e same f i r m s e v e r a l y e a r s a p a r t may d i f f e r o n l y as t o t h e s p e c i f i c The  approach i s t h e same, time a f t e r t i m e , much l i k e  f i l l i n g i n a checklist. typed  details.  mechanically  T h i s i n f l e x i b i l i t y produces such s t e r e o -  r e p o r t s t h a t they do n o t a d e q u a t e l y examine a l l o f t h e  v a r i a b l e s important  t o t h e a n a l y s i s o f a s p e c i f i c l o c a t i o n , and  t h i s i n turn a f f e c t s t h e i r r e l i a b i l i t y example:  and u s e f u l n e s s .  For  t h e r e i s o f t e n no r e f e r e n c e t o t h e economic c l i m a t e  under which s a l e s e s t i m a t e s  a r e p r o j e c t e d ; no r e f e r e n c e  i s made  Applebaum, "An E v a l u a t i o n o f S t o r e L o c a t i o n Research S t u d i e s , " i n K o r n b l a u , op. c i t . , p. 10. I b i d . , p. 11.  26 t o t h e p r e s e n t and f u t u r e o u t l o o k f o r t h e r e g i o n a l economy; t h e competitive s t r u c t u r e i s Inadequately  e v a l u a t e d ; t h e methods  used i n p r o j e c t i n g p o p u l a t i o n o r income a r e n o t e x p l a i n e d , meaning t h a t t h e d a t a must be accepted  on f a i t h and cannot be  e v a l u a t e d ; sources o f d a t a a r e e i t h e r i m p r o p e r l y i d e n t i f i e d o r o m i t t e d , and i n f a c t i t i s I m p o s s i b l e t o determine i n many i n s t a n c e s whether t h e f o u n d i n g s  a r e based on " f a c t s " o r a r e m e r e l y  u n s u b s t a n t i a t e d g u e s s e s ; d e f i n i t i o n s are n o t r i g i d ; t h e r e i s o f t e n a s i g n i f i c a n t l a c k o f i n f o r m a t i o n on consumer  shopping  b e h a v i o u r p a t t e r n s i n t h e g i v e n a r e a ; and many r e p o r t s appear b i a s e d i n t h a t they o n l y i n c l u d e arguments which support t h e d e s i r a b i l i t y o f a s i t e , and i g n o r e t h e u n f a v o u r a b l e  aspects,  w h i c h , i f mentioned, might tend t o i n f l u e n c e t h e d e c i s i o n - m a k e r s 28  n e g a t i v e l y towards t h a t s i t e .  F u r t h e r m o r e , s e p a r a t e l y con-  d u c t e d , p r a c t i c a l r e s e a r c h s t u d i e s c a r r i e d out on t h e same l o c a t i o n problem can p r o v i d e wide v a r i a t i o n s and d i s c r e p a n c i e s in their findings. T h i s i s e v i d e n t i n t h e f o l l o w i n g statement: "They q u e s t i o n e d t h e r e l i a b i l i t y o f t h e d i f f e r e n t s a l e s p o t e n t i a l s e s t i m a t e d f o r t h e shopping c e n t r e as a whole and f o r t h e department s t o r e i n p a r t i c u l a r . The e x e c u t i v e s were p u z z l e d by the v a r i a t i o n s i n the p o p u l a t i o n , income, and e x p e n d i t u r e d a t a and p r o j e c t i o n s i n t h e s e v e r a l r e p o r t s . They wondered whether they should g e t a prominent p r o f e s s o r o f m a r k e t i n g t o " t r y t o e x t r a c t from t h e r e p o r t some c l e a r - c u t g u i d e l i n e s f o r t h e Draper Companies." The p r e s i d e n t f e l t t h a t " f o r t h e Delmonte p r o j e c t we sure c o u l d use o b j e c t i v e g u i d e l i n e s , i n a d d i t i o n t o our own o b s e r v a t i o n s , e x p e r i e n c e , and judgment. I t i s a b i g p r o j e c t and t h e r e remain many unknowns. I n t h e l o n g r u n success w i l l depend  W. Applebaum, S t o r e L o c a t i o n S t r a t e g y Cases, R e a d i n g , M a s s a c h u s e t t s , Add!son-Wesley P u b l i s h i n g Co., 1968, p. 70.  27 on t h e volume of s a l e s t h a t the shopping c e n t r e can g e n e r a t e . T h i s s t i l l remains a f u z z y area." ° 2  I n summary, t h e s t a t e o f t h e a r t i s n o t p a r t i c u l a r l y s a t i s f a c t o r y - h u t the demand f o r s o p h i s t i c a t e d r e s e a r c h i s i n c r e a s i n g , and h o p e f u l l y , as t h e p r a c t i t i o n e r s improve t h e i r l e v e l o f e x p e r t i s e , and as f u r t h e r advances a r e a c h i e v e d i n the techniques of l o c a t i o n a n a l y s i s , the q u a l i t y of p r a c t i c a l r e s e a r c h s t u d i e s w i l l improve a l o n g w i t h t h e r i s i n g demand f o r them. N e c e s s i t y f o r F u r t h e r Development The q u e s t i o n a r i s e s , c a n l o c a t i o n r e s e a r c h he a s c i e n c e ? S c i e n c e attempts  t o d e s c r i b e phenomena and p r e d i c t outcomes.  Not u n t i l l o c a t i o n r e s e a r c h i s capable o f a c c u r a t e l y and cons i s t e n t l y p r e d i c t i n g outcomes can i t be c a l l e d a s c i e n c e . How s u c c e s s f u l i s p r e s e n t l o c a t i o n r e s e a r c h i n i t s a b i l i t y to p r e d i c t accurately?  Few f i r m s t h a t conduct l o c a t i o n  r e s e a r c h p r o v i d e adequate budgets f o r f o l l o w - u p r e s e a r c h t o check the degree o f a c c u r a c y o f the o r i g i n a l s a l e s e s t i m a t e s actual realized sales.  F u r t h e r m o r e , t h e u n p r e d i c t a b l e changes  I n c o m p e t i t i o n and t h e changes i n m e r c h a n d i s i n g cloud the e v a l u a t i o n of r e s u l t s . f i r m s and shopping  against  p o l i c i e s can  However, t h e f a c t t h a t r e t a i l  c e n t r e d e v e l o p e r s want more l o c a t i o n r e s e a r c h ,  and a r e w i l l i n g t o pay f o r i t ,  suggests  t h a t they b e l i e v e t h i s  30  r e s e a r c h has v a l u e f o r them. Applebaum, "An E v a l u a t i o n o f S t o r e L o c a t i o n Research S t u d i e s , " i n K o r n b l a u , op. c l t . , p. 1 1 . 30  Applebaum, " S t o r e L o c a t i o n R e s e a r c h - A r t o r S c i e n c e ? " i n K o r n b l a u , op. c i t . , p. 5.  28 Improvements I n l o c a t i o n r e s e a r c h a r e r e q u i r e d i n many 31  areas:  1 ) i n e f f e c t i v e l y a s s e s s i n g t h e impact o f c o m p e t i t i o n .  E f f o r t s have c o n c e n t r a t e d on measuring c o m p e t i t i o n q u a n t i t a t i v e l y , e i t h e r by t h e number o f s t o r e s , o r t h e number o f square f e e t , o r the amount o f s t o r e f r o n t a g e .  But vfoat i s t h e e f f e c t o f v a r i e t y  and q u a l i t y o f p r o d u c t s s o l d , p r i c e s t r u c t u r e ,  merchandising  s t r a t e g i e s , age and c o n d i t i o n o f t h e f a c i l i t i e s , and p e r s o n n e l s e r v i c e s - a l l t h e q u a l i t a t i v e a s p e c t s which c o n t r i b u t e t o image and consumer acceptance?  2) i n knowledge o f consumer e x p e n d i 32  t u r e s and shopping h a b i t s .  More must be known about consumer  e x p e n d i t u r e s f o r d i f f e r e n t t y p e s o f goods and s e r v i c e s , by s o c i o economic groups and by g e o g r a p h i c  a r e a s , and t h e reasons f o r any  patterns or differences i n pattern. s t a n d i n g o f how and why p e o p l e  shop.  There must be a b e t t e r under3) i n d e v e l o p i n g b e t t e r  c r i t e r i a f o r j u d g i n g t h e optimum q u a n t i t y o f r e t a i l  facilities  r e q u i r e d by a g i v e n a r e a , and as a c o r o l l a r y , what s i z e o f c e n t r e , how many s t o r e s i n t h a t c e n t r e , o f what s i z e and what t y p e . 4) i n a s s e s s i n g t h e e f f e c t s on t h e c e n t r e ' s p r o f i t a b i l i t y o f such f a c t o r s as s t o r e s i z e s , s a l e s p e r square f o o t , s a l e s p o t e n t i a l s - i n f a c t , every f a c t o r which a f f e c t s t h a t c e n t r e ' s p r o f i tability.  The aim should be t o p r o v i d e r e f i n e d a n a l y t i c a l  and f o r m u l a s which a r e capable o f p r o d u c i n g a c c u r a t e  tools  absolute  numbers f o r d e c i s i o n - m a k i n g g i v e n p r o p e r q u a n t i f i e d i n p u t s .  As  w i l l be seen l a t e r , p r e s e n t l o c a t i o n r e s e a r c h methods a r e f a r from p r o v i d i n g such a c c u r a t e , q u a n t i t a t i v e f o r m u l a s , so t h a t a s s e s s i n g t h e e f f e c t s o f v a r i o u s f a c t o r s on p r o f i t a b i l i t y I b i d . , pp. 4-5. Ibid.  still  29 r e q u i r e s a good d e a l of guesswork and s u b j e c t i v e judgment. 5) i n d e t e r m i n i n g how 33 tion analysis.  t o make b e t t e r use of computers i n l o c a -  Their a b i l i t y  t o s t o r e and r e t r i e v e d a t a ,  to p r o v i d e f a s t e r , more economical  p r o c e s s i n g of  statistical  i n f o r m a t i o n can p r o v i d e i n v a l u a b l e a i d s and r e f i n e m e n t s to computations,  and  any  p r o v i d e d t h a t i n p u t s are c o r r e c t , m e a n i n g f u l ,  and  practical. Summary Planned  shopping  c e n t r e s are i n c r e a s i n g i n  and have e v o l v e d t o meet the needs generated mental f a c t o r s i n a modern s o c i e t y . j e c t s i s no l o n g e r a s s u r e d .  by changing  environ-  But the success o f such p r o -  The demand f o r improved  of l o c a t i o n assessment i s growing  importance  techniques  i n r e c o g n i t i o n o f the f a c t t h a t  sound l o c a t i o n a l d e c i s i o n s are becoming ever more i m p o r t a n t to the success of such r e t a i l  e s t a b l i s h m e n t s , and p r e s e n t l y a v a i l a b l e  t e c h n i q u e s o f l o c a t i o n assessment l e a v e room f o r improvement. The economic f e a s i b i l i t y  of a new  p r o j e c t depends  p r i m a r i l y upon whether t h a t p r o j e c t w i l l a c h i e v e a s u f f i c i e n t volume o f s a l e s a f t e r opening.  The p r i m a r y t a s k o f l o c a t i o n  a n a l y s i s i s t o p r o v i d e an a c c u r a t e e s t i m a t e of the s a l e s volume which a proposed r e t a i l f a c i l i t y can expect to a c h i e v e . i n v o l v e s e s t i m a t i n g the number of consumers who to  w i l l be drawn  the c e n t r e , and the d i s c u s s i o n of t h i s s u b j e c t commences i n  the n e x t  33 J  This  Ibid.  Chapter.  CHAPTER I I I THE  CONCEPT OP TRADE AREA  l o c a t i o n a l d e c i s i o n s are p r i m a r i l y concerned w i t h things:  two  e v a l u a t i n g the s a l e s p o t e n t i a l of a g i v e n l o c a t i o n ,  and  d e t e r m i n i n g the b e s t mix i n f a c i l i t i e s and merchandise which w i l l maximize s a l e s . for  the new  T h i s i n v o l v e s s t u d y i n g the p o t e n t i a l customers  centre.  T r a d i t i o n a l l y , i t has been common t o assume  t h a t p o t e n t i a l customers are drawn from a s p e c i f i c r e g i o n s u r r o u n d i n g the c e n t r e . trade area.  geographical  Such a r e g i o n i s known as  the  The f o l l o w i n g d i s c u s s i o n i l l u s t r a t e s t h i s p o i n t . C e n t r a l P l a c e Theory  Urban geographers have developed known as C e n t r a l P l a c e T h e o r y the m a r k e t i n g  1  a body of t h e o r y  t o account f o r the r e g u l a r i t y i n  f u n c t i o n s performed by " c e n t r a l p l a c e s . "  l o w i n g d i s c u s s i o n b r i e f l y o u t l i n e s the o b s e r v a t i o n s and  The  fol-  concepts  on w h i c h C e n t r a l P l a c e Theory i s founded. I t has l o n g been r e c o g n i z e d t h a t a monotonous p a t t e r n of r e g u l a r i t y e x i s t s i n the g e o g r a p h i c i n any t y p i c a l c o u n t r y .  d i s p e r s i o n of  These s e t t l e m e n t s p r o v i d e d  b u s i n e s s and s o c i a l f u n c t i o n s t o the townspeople and population.  As s u c h , each s e t t l e m e n t was  c e n t r e w h i c h developed  settlements shopping, surrounding  i n a c t u a l i t y a market  t o s u p p l y a v a r i e t y of s e r v i c e s t o the  See f o r example B. J . L. B e r r y and A. P r e d , C e n t r a l P l a c e S t u d i e s : A B i b l i o g r a p h y of Theory and A p p l i c a t i o n s , P h l l a d e l p h i a, P e n n s y l v a n i a , R e g i o n a l S c i e n c e Research I n s t i t u t e , 1965; a l s o , B. J . I . B e r r y , Geography of M a r k e t C e n t r e s and R e t a i l D i s t r i b u t i o n , Englewood C l i f f s , New J e r s e y , P r e n t i c e - H a l l , I n c . , 1967.  31 p o p u l a t i o n of a p a r t i c u l a r a r e a . l o c a t i o n s f o r grouping  They e v o l v e d as  convenient  t o g e t h e r v a r i o u s s e r v i c e s to meet the  needs o f the p o p u l a t i o n . Around any l a r g e c i t y , i n e v e r - w i d e n i n g  c i r c l e s , are a  number o f towns, d i m i n i s h i n g i n s i z e as the d i s t a n c e from city increases.  the  However, each s m a l l e r s e t t l e m e n t , o r town, i s  i t s e l f surrounded by s t i l l  s m a l l e r s a t e l l i t e c l u s t e r s of  activity.  These " c e n t r a l p l a c e s " a l l s u p p l y c e n t r a l i z e d market s e r v i c e s to t h e i r s u r r o u n d i n g p o p u l a t i o n s , but on a l e s s e r s c a l e as s i z e decreases.  T h i s i s the v i s i b l e evidence  c a l l a central place hierarchy: 2  their  o f what t h e o r i s t s  s u c c e s s i v e c l a s s e s of i n t e r -  dependent market c e n t r e s . C e n t r a l p l a c e s form a system t h a t i n c l u d e s i n t e r a c t i n g , inter-dependent  parts.  The l a r g e r c e n t r e s d u p l i c a t e the  r e t a i l i n g f u n c t i o n s o f the s m a l l e r c e n t r e s but a l s o p r o v i d e a d d i t i o n a l f u n c t i o n s i n more e s t a b l i s h m e n t s .  Each market c e n t r e  has a w e l l d e f i n e d a r e a from which i t draws i t s customers.  Larger  c e n t r e s draw from a l a r g e r a r e a , and  s m a l l e r c e n t r e s from s m a l l e r  areas.  a l l o f the f u n c t i o n s found  Small c e n t r e s cannot perform  i n the l a r g e r c e n t r e because the market a r e a they command i s too s m a l l to support  some o f the f u n c t i o n s p r o f i t a b l y .  For  activities  r e q u i r i n g v e r y s m a l l market a r e a s , such as food o u t l e t s , v i l l a g e s are a b l e t o stand alone and compete w i t h l a r g e r s u r r o u n d i n g p l a c e s over s h o r t d i s t a n c e s . minimum market a r e a s  However, f o r s t o r e s r e q u i r i n g l a r g e r  ( f o r example, d r y c l e a n e r s ) , l a r g e r c e n t r e s  dominate the v i l l a g e s because they o f f e r a f u n c t i o n which i s not B . J . B e r r y , " C e n t r a l P l a c e Theory," i n K o r n b l a u , op. c i t . , p. 14.  32 found i n v i l l a g e s , and i n t h i s way  encourage customers t o t r a v e l  f u r t h e r t h a n t o the n e a r e s t v i l l a g e .  S i m i l a r l y , those  stores  r e q u i r i n g v e r y l a r g e market a r e a s (department s t o r e s ) are found o n l y i n the l a r g e s t c e n t r e s , and  consumers l i v i n g near the  v i l l a g e s and towns are f o r c e d t o t r a v e l beyond them t o the cities. I t i s t h i s s u c c e s s i o n of c l a s s e s of c e n t r e s a l l arranged i n a h i e r a r c h i c a l g e o g r a p h i c a l p a t t e r n t h a t forms a b a s i c p a r t o f C e n t r a l P l a c e Theory. Because s u c c e s s i v e s t e p s i n the h i e r a r c h y c o n t a i n l a r g e r c e n t r e s p r o v i d i n g more f u n c t i o n s f o r l a r g e r market a r e a s ,  the  number o f d i f f e r e n t k i n d s o f b u s i n e s s t y p e s i s used as an  indica-  t i o n of a c e n t r e ' s s t a t u s i n the h i e r a r c h y . I n r u r a l a r e a s d i s t a n c e has a major impact on the o f market c e n t r e because the t r a v e l time and  choice  c o s t are so g r e a t .  Competing c e n t r e s draw customers from the a r e a between the i n p r o p o r t i o n t o the a t t r a c t i v e power o f the c e n t r e .  centres  At a point  somewhere between the c e n t r e s c a l l e d the " b r e a k i n g p o i n t , " consumers on e i t h e r s i d e tend t o p a t r o n i z e the c e n t r e on t h e i r s i d e of t h i s h y p o t h e t i c a l p o i n t .  D i f f e r e n c e s i n the a t t r a c t i v e n e s s  of c e n t r e s m e r e l y p u l l the b r e a k i n g p o i n t one way  o r the  However, i n m e t r o p o l i t a n a r e a s t h e r e i s no such t h i n g as  other. an  a b s o l u t e b r e a k i n g p o i n t s i n c e consumers are a b l e t o choose from a number o f c e n t r e s a l l w i t h i n the maximum d i s t a n c e s t h e y  are  w i l l i n g to t r a v e l . I n u r b a n a r e a s , i t was  f e l t that r e t a i l  facilities  f o l l o w e d a h i e r a r c h y o f market c e n t r e s (convenience  I b i d . , p.  17.  clusters,  33 neighbourhood,  community, and r e g i o n a l c e n t r e s ) comparable t o  the h i e r a r c h y of centres i n r u r a l areas.  However, market c e n t r e s  i n urban a r e a s served l a r g e r p o p u l a t i o n s than those i n r u r a l areas.  S i n c e the p o p u l a t i o n s e r v e d was l a r g e r , the g e o g r a p h i c a l  t r a d e a r e a r e q u i r e d t o support t h a t c e n t r e d i d not need t o be as l a r g e as i n t h e r u r a l s i t u a t i o n .  Furthermore,  t r a d e areas i n  urban a r e a s tended t o o v e r l a p t o a g r e a t e r e x t e n t than i n r u r a l areas. T h r e s h o l d and Range C e n t r a l P l a c e Theory b e g i n s by examining two elements r e l e v a n t t o r u r a l r e g i o n s : 1) the t h r e s h o l d of a given k i n d of business; t h a t I s , the s m a l l e s t market a r e a t h a t w i l l support the s m a l l e s t e c o n o m i c a l l y f e a s i b l e e s t a b l i s h ment o f t h e c l a s s ; and 2) the range o f a c e n t r e , or the maximum d i s t a n c e consumers are w i l l i n g to t r a v e l t o i t . The t h r e s h o l d f o r each k i n d o f b u s i n e s s i s e s t a b l i s h e d , and then f o r each k i n d o f b u s i n e s s the number o f s t o r e s o f t h r e s h o l d s i z e t h a t can be supported by the market i n a g i v e n area i s determined.  A c c o r d i n g t o l o g i c a l and t h e o r e t i c a l  s i d e r a t i o n s o f c o m p e t i t i o n , t h e s e s t o r e s would be e v e n l y throughout  t h e a r e a w i t h each s t o r e surrounded  conspaced  by a compact  m i n i m a l market a r e a which does n o t o v e r l a p w i t h the market areas for  other centres.  T h e o r e t i c a l l y , t h e n , each o f these s t o r e s  c a p t u r e s a segment o f the t o t a l market, and s e r v e s i t e x c l u s i v e l y . In  the h y p o t h e t i c a l case o f a p e r f e c t l y u n i f o r m p o p u l a t i o n d i s t r i -  b u t i o n , t h e o r e t i c a l l y these s t o r e s would be r e g u l a r l y throughout  4  spaced  the market, and market a r e a s would be a s e t o f r e g u l a r  I b i d . , p.  18.  34 hexagons w i t h each s t o r e i n the c e n t r e o f the hexagon. manner the t o t a l market would be o p t i m a l l y s e r v e d .  In t h i s  However, as  the a c t u a l p o p u l a t i o n d i s t r i b u t i o n v a r i e s from t h i s p e r f e c t l y u n i f o r m p a t t e r n , the s p a t i a l arrangement o f s t o r e s and market a r e a s v a r i e s from such a t h e o r e t i c a l arrangement. O b v i o u s l y , the consumer would r a t h e r v i s i t a s i n g l e c e n t r a l p l a c e f o r a v a r i e t y o f needs than t r a v e l t o a l o c a t i o n f o r each d i f f e r e n t commodity he r e q u i r e s .  separate  I t i s assumed  t h a t some l a r g e r c e n t r e (the c i t y ) p e r f o r m s a l l the f u n c t i o n s r e q u i r e d by consumers.  L o c a t i o n s o f c e n t r e s around the m e t r o p o l i s  a r e then s h i f t e d w i t h i n the l i m i t s imposed by the t h r e s h o l d - s i z e d t r a d e areas  (the minimum) and the o u t e r "range" o r maximum d i s -  tance beyond which consumers w i l l not t r a v e l .  I n o t h e r words,  c e n t r e s around the c i t y o c c u r a t l o c a t i o n s where the  necessary  t h r e s h o l d - s i z e d t r a d e a r e a e x i s t s w i t h i n a l i m i t e d d i s t a n c e from the c e n t r e ( l i m i t e d by the range o f the goods o f f e r e d ) . s h u f f l i n g minimizes  This  the number o f c e n t r e s r e q u i r e d t o serve con-  sumer needs and l e a d s to a h i e r a r c h y o f p l a c e s by s i z e , connected i n an i n t e r d e p e n d e n t  system.  Through i t s concepts  o f t h r e s h o l d and range, C e n t r a l  P l a c e Theory h i g h l i g h t s the importance o f the t r a d e a r e a i n r e t a i l l o c a t i o n a n a l y s i s , and p o i n t s out the fundamental problems f a c e d by any d e v e l o p e r o r r e t a i l e r c o n t e m p l a t i n g  a new  location;  does a s u f f i c i e n t (a t h r e s h o l d ) t r a d e a r e a e x i s t f o r the  pro-  posed c e n t r e w i t h i n the d i s t a n c e l i m i t s imposed by the ranges o f t h e goods o f f e r e d a t the c e n t r e ?  W i t h i n the range o f t h i s c e n t r e ,  o r the maximum d i s t a n c e consumers are w i l l i n g to t r a v e l t o i t , i s t h e r e a s u f f i c i e n t t r a d e a r e a t o support t h i s  centre?  35 T h i s d i s c u s s i o n o f C e n t r a l P l a c e Theory h a s been i n t e n t i o n a l l y b r i e f and s u p e r f i c i a l i n r e c o g n i t i o n o f t h e o b s e r v a t i o n t h a t t h e t h e o r y i s p r i m a r i l y o f v a l u e as a d e s c r i p t i v e t o o l r a t h e r than an a n a l y t i c a l one, and as such i t i s o f l i m i t e d importance estimating.  i n a study o f a n a l y t i c a l t e c h n i q u e s o f s a l e s volume However, i t does h e l p t o i n t r o d u c e t h e concept o f  t r a d e a r e a and t h e importance  of trade area i n r e t a i l  sales  volume e s t i m a t i n g . D e f i n i n g "Trade A r e a " The d e f i n i t i o n o f t h e concept  "trade area" v a r i e s  a c c o r d i n g t o t h e way t h e concept i s a p p l i e d i n d i f f e r e n t tions.  situa-  I t can be d e f i n e d as " t h a t a r e a from which a s t o r e g e t s 5  i t s b u s i n e s s - where t h e customers come from."  The t r a d e a r e a  i s o f t e n d e s c r i b e d as a g e o g r a p h i c a l l y d e l i n e a t e d r e g i o n cont a i n i n g t h e p r o b a b l e customers f o r t h e goods found i n t h e shopping centre.  I t I s o f t e n d e f i n e d as t h e a r e a o f i n f l u e n c e from  which  a shopping c e n t r e c o u l d expect t o d e r i v e 80 - 90% o f i t s t o t a l s a l e s volume, t h i s a r e a o f t e n b e i n g d i v i d e d i n t o p r i m a r y ,  secondary,  and o c c a s i o n a l l y t e r t i a r y zones depending on t h e method o f a n a l y s i s . S t a t i n g t h e e x a c t d e f i n i t i o n o f a t r a d i n g a r e a ( o r any o f i t s subdivisions) i sd i f f i c u l t .  There a r e p r o b a b l y as many d e f i n i t i o n s  as t h e r e a r e s t o r e s and l o c a t i o n a n a l y s t s .  To some, t h e p r i m a r y  t r a d i n g a r e a f o r example i s s i m p l y "where t h e s t o r e g e t s most o f W. Applebaum and S a u l B. Cohen, "Guideposts t o S t o r e L o c a t i o n S t r a t e g y , " i n K o r n b l a u , op. c l t . , p. 33.  D  ^ W. Applebaum, "Advanced Methods f o r M e a s u r i n g S t o r e Trade Areas and M a r k e t P e n e t r a t i o n , " i n K o r n b l a u , op. c l t . , p. 215.  36 I t s business."  To o t h e r s , i t i s p r e c i s e l y , "where t h e s t o r e g e t s 7  75$ o f i t s b u s i n e s s , " and so on.  N e v e r t h e l e s s , the p o i n t t o  remember i s t h a t t h e t r a d e a r e a c o n t a i n s t h e p o t e n t i a l from which t h e r e t a i l o u t l e t a t t r a c t s e x p e n d i t u r e s .  customers  The o u t e r  l i m i t o f t h i s t r a d e a r e a i s c o n s i d e r e d t o be t h a t p o i n t a t which the r e t a i l o u t l e t ceases t o a t t r a c t  customers.  Importance o f t h e Trade A r e a Concept There i s o n l y one way i n which t h e f i n a l d e c i s i o n on t h e c h o i c e o f l o c a t i o n s h o u l d be made.  That i s through t h e c a r e f u l  p r e p a r a t i o n o f b u s i n e s s volume e s t i m a t e s on a l t e r n a t i v e Prom t h e p o i n t o f view o f t h e shopping  sites.  centre developer, the  d e c i s i o n t o open a new c e n t r e must be based, i n t h e end, upon a comparison o f t h e amount o f b u s i n e s s volume t h a t can be done a t each l o c a t i o n and t h e occupancy c o s t o f l o c a t i o n , t o g e t h e r w i t h g t h e p r o j e c t i o n o f both b u s i n e s s volume and c o s t s i n t o t h e f u t u r e . Obviously l o c a t i o n i s n o t the only f a c t o r determining the success o f t h e o p e r a t i o n o r even t h e b u s i n e s s volume. merchandising  ability,  There a r e a l s o  reputation, character of service, personnel,  c o m p e t i t i v e c o s t o f commodities and a g r e a t many o t h e r s .  However,  i n e s t i m a t i n g b u s i n e s s volume, t h e prime a r e a o f concern and t h e major c h a l l e n g e i n l o c a t i o n r e s e a r c h , i s i n q u a n t i t a t i v e l y e v a l u a t i n g t h e p o t e n t i a l o f a c e n t r e ' s t r a d e a r e a , from which i t w i l l draw i t s b u s i n e s s volume.  Kane, op. c i t . , p. 27. N e l s o n , op. c i t . , p. 1 4 1 .  37 A. thorough knowledge o f t h e c h a r a c t e r and e x t e n t o f t h i s trade area i s e s s e n t i a l .  The d e v e l o p e r o f a proposed  f a c i l i t y must have t h i s i n f o r m a t i o n i n o r d e r t o e v a l u a t e c a l l y the l i k e l y success o f the venture.  retail  realisti-  Not o n l y does t h e  knowledge o f t h e r e t a i l t r a d e a r e a p r o v i d e a b a s i s f o r e s t i m a t i n g p o t e n t i a l s a l e s , b u t I t a l s o makes i t p o s s i b l e t o determine investment  requirements  f o r l a n d , b u i l d i n g s and f i x t u r e s , as  w e l l as t h e t y p e s o f t e n a n t s and k i n d s o f merchandise o f f e r i n g s , p r o m o t i o n a l a c t i v i t i e s and so on. T r a d i t i o n a l l y , d e t e r m i n i n g t h e volume o f b u s i n e s s which can be done a t a g i v e n l o c a t i o n i n v o l v e s c o u n t i n g t h e p o t e n t i a l customers i n t h e t r a d i n g a r e a and f i n d i n g o u t i n d e t a i l how much money they have t o spend and a r e w i l l i n g t o spend f o r t h e type o f goods p r o v i d e d by t h e s t o r e s i n t h e c e n t r e under s t u d y .  This  step p r o v i d e s an answer t o t h e q u e s t i o n o f how much b u s i n e s s i s a v a i l a b l e , i n t o t a l , i n t h i s trading area.  The remainder o f t h e  a n a l y s i s o f t h e s i t e h a s p r i n c i p a l l y t o do w i t h d e t e r m i n i n g how much o f t h e t o t a l b u s i n e s s can be c a p t u r e d by an o u t l e t t h e r e . ^ But measuring how much b u s i n e s s i s a v a i l a b l e r e q u i r e s f i r s t t h a t the t r a d e a r e a be d e l i n e a t e d , a s u b j e c t which p r e s e n t s c o n s i d e r a b l e d i f f i c u l t i e s , as d i s c u s s e d below. Problem o f Trade A r e a D e l i n e a t i o n Trade areas a r e d e l i n e a t e d by many d i f f e r e n t methods. These i n c l u d e t o p o g r a p h i c a l f e a t u r e s w h i c h e n f o r c e a t r a d e a r e a boundary, c o m p e t i t i o n , d r i v i n g t i m e , and a g r e a t many o t h e r  I b i d . , p. 148.  38  f a c t o r s a l l o f w h i c h are d i s c u s s e d i n the n e x t c h a p t e r .  In f a c t ,  i n l o c a t i o n a n a l y s i s , the problem o f t r a d e a r e a d e l i n e a t i o n i s so complex, t h a t the whole economic J u s t i f i c a t i o n f o r the  shopping  c e n t r e i s dependent upon s e c u r i n g a s a t i s f a c t o r y b u s i n e s s volume for  t h a t c e n t r e , and t h i s b u s i n e s s volume i s d e r i v e d from t h a t  centre's trade area.  I n o r d e r t o e s t i m a t e the s a l e s volume, i t  i s therefore necessary  t o know the s i z e o f t h a t t r a d e a r e a  both  i n terms o f i t s p h y s i c a l s i z e , and i n terms o f i t s d o l l a r volume size.  S i n c e the f a c t o r s which shape the t r a d e a r e a are m u l t i t u d i -  nous, i t becomes a major c h a l l e n g e o f l o c a t i o n a n a l y s i s not o n l y to for  o u t l i n e t h a t t r a d e a r e a but t o e s t i m a t e I t s p o t e n t i a l volume the c e n t r e i n q u e s t i o n .  By f a r the most d i f f i c u l t problem  i n l o c a t i o n a n a l y s i s i n v o l v e s a s c e r t a i n i n g the l i m i t s o f a centre's area of i n f l u e n c e .  T r a d i t i o n a l l y , t h i s trade area  has  been d e l i m i t e d g e o g r a p h i c a l l y t o encompass a c e r t a i n a r e a s u r rounding  a centre.  q u e s t i o n o f how  The p o i n t o f c o n t e n t i o n a r i s e s over  the  t o d e c i d e where the a r e a o f i n f l u e n c e ( t r a d e  area) terminates. So much has been w r i t t e n on t r a d i n g areas s i n c e the t u r n o f the c e n t u r y t h a t one  can t r a c e out the h i s t o r i c a l development  o f t r a d i t i o n a l methods o f a n a l y s i s . to  The f i r s t attempts  sought  e x p l a i n the demand f o r r e t a i l merchandise i n an a r e a i n terms  of economic f a c t o r s such as p o p u l a t i o n and i t s d i s t r i b u t i o n , p o p u l a t i o n c h a r a c t e r i s t i c s , income, l o c a t i o n o f e x i s t i n g ments and the l i k e s .  establish-  Some a u t h o r s u s i n g t h i s approach d i s c u s s e d  the economic base o f a community f o r r e t a i l i n g i n l o o s e and i n f o r m a l f a s h i o n , w h i l e o t h e r s more q u a n t i t a t i v e l y i n c l i n e d to develop  sought  q u i t e s o p h i s t i c a t e d l a w s o r f o r m u l a s which when s o l v e d  supplied i n d i c e s of r e t a i l p o t e n t i a l .  The  second b a s i c approach  39 s t a r t s w i t h t h e consumer and t h r o u g h s u r v e y d a t a a t t e m p t s t o e v a l u a t e r e t a i l p o t e n t i a l i n terms o f h i s shopping h a b i t s .  This  type o f a n a l y s i s f o c u s e s on such t h i n g s as how f a r t h e t y p i c a l o r average consumer i s w i l l i n g t o t r a v e l f o r c e r t a i n t y p e s o f merchandise, and g e n e r a l l y a t t e m p t s t o d i s c o v e r u n d e r l y i n g r e g u l a r i t i e s i n t h e manner i n which he o r g a n i z e s h i s t r a v e l patterns. Consumer B e h a v i o u r and Trade A r e a D e l i n e a t i o n Trade a r e a d e l i n e a t i o n i s a problem o f a s s e s s i n g how consumers w i l l r e a c t t o t h e v a r i o u s f a c t o r s a f f e c t i n g consumer m o t i v a t i o n i n t h e s e l e c t i o n o f a r e t a i l f a c i l i t y i n which t o p u r c h a s e t h e v a r i o u s t y p e s o f goods they r e q u i r e .  The consumer  i n t u i t i v e l y computes t h e advantages and d i s a d v a n t a g e s o f v a r i o u s shopping l o c a t i o n s i n terms o f a b e n e f i t - c o s t t r a d e - o f f :  what  s a t i s f a c t i o n can be a c h i e v e d a t what c o s t i n money, t i m e , and energy.  The c o s t s o f a c q u i r i n g goods a r e o f two k i n d s :  1) t h e  d i r e c t monetary o u t l a y f o r t h e a r t i c l e o r s e r v i c e , and 2) t h e e x p e n d i t u r e o f money, t i m e , and p h y s i c a l o r nervous energy i n g e t t i n g t o o r from t h e p l a c e where t h e a r t i c l e o r s e r v i c e can 10 be o b t a i n e d . The r e s i s t a n c e t o movement i n space has been 11 g e n e r a l i z e d i n t h e term  f r i c t i o n o f space."  F r i c t i o n of  space i s b a s i c a l l y a c o s t element i n t h e b e n e f i t - c o s t a n a l y s i s . The importance o f " f r i c t i o n o f space" i s e v i d e n t i n t h e C.T. J o n a s s e n , The Shopping C e n t r e Versus Downtown, Columbus, Ohio, Ohio S t a t e U n i v e r s i t y , Bureau o f B u s i n e s s R e s e a r c h , C o l l e g e o f Commerce and B u s i n e s s A d m i n i s t r a t i o n , 1955, p. 6. 1  1  K e l l e y , op. c l t . , p . 51.  40 o b s e r v a t i o n t h a t most shopping c e n t r e s draw b u s i n e s s w i t h an i n t e n s i t y t h a t d e c r e a s e s g e n e r a l l y as d i s t a n c e from the c e n t r e 12 increases.  A map t h a t shows t h e d i s t r i b u t i o n o f a shopping  c e n t r e ' s customers most o f t e n r e v e a l s a d e f i n i t e c l u s t e r e d conc e n t r a t i o n c l o s e t o the c e n t r e , g e n e r a l l y w i t h i n a number o f miles of i t .  As d i s t a n c e from t h e c e n t r e i n c r e a s e s , t h e f r e 13  quency o f customers d i m i n i s h e s r a p i d l y ,  a r e s u l t of the f a c t  that the i n c r e a s i n g costs involved i n t r a v e l l i n g greater  dis-  t a n c e s i n c r e a s e t h e consumer's r e s i s t a n c e t o p a t r o n i z i n g t h a t centre. I t i s t h e r e f o r e t h e consumer's shopping b e h a v i o u r which governs t h e p o t e n t i a l l i k e l i h o o d o f h i s p a t r o n a g e a t the shopping centre.  H i s shopping b e h a v i o u r i s governed by h i s p e r s p e c t i v e  toward c e r t a i n c o s t - b e n e f i t f a c t o r s .  To e s t i m a t e  the p o t e n t i a l  p a t r o n a g e f o r a proposed shopping c e n t r e , an< u n d e r s t a n d i n g those f a c t o r s a f f e c t i n g behaviour i s necessary.  of  I t i s also  n e c e s s a r y t o u n d e r s t a n d how t h e consumer r e a c t s t o such f a c t o r s . Only then can an a n a l y s t hope t o determine t h e p o t e n t i a l patronage and  i n a d d i t i o n , the p o t e n t i a l s a l e s volume which i s l i k e l y t o  accrue to that  centre. Trade A r e a S u b d i v i s i o n s  Location analysts frequently f i n d i t useful to subdivide the t r a d e a r e a i n t o p r i m a r y ,  12 Kane, op. c i t . , p. 26. 1 3  I b i d . , p. 27.  secondary, and t e r t i a r y ( o r f r i n g e )  41 areas.  14  Such s u b d i v i s i o n s are t y p i c a l l y r e l a t e d t o a u t o m o b i l e  t r a v e l time, or time-distance,  and  are p a r t i c u l a r l y u s e f u l i n  s t u d y i n g proposed l a r g e p l a n n e d shopping c e n t r e s i t e s . few p u b l i s h e d  Very  q u a n t i t a t i v e d a t a are a v a i l a b l e to s u p p o r t the  v a l i d i t y and u s e f u l n e s s o f t r a v e l time i n t e r v a l s t o d e l i n e a t e 15 s u b d i v i s i o n s of t r a d e  areas.  I n d e f i n i n g the p r i m a r y t r a d e a r e a , a n a l y s t s  arbitrarily  s e t a r a t i o of s t o r e s a l e s from t h a t a r e a t o t o t a l s t o r e s a l e s . The  f i g u r e used i s g e n e r a l l y 50 - 70%.  I f the a n a l y s t u s e s the  f i g u r e of 60% of t o t a l s a l e s , t h e p r i m a r y t r a d e a r e a would  be  d e f i n e d as t h a t a r e a c l o s e s t t o the s t o r e , has the h i g h e s t r a t i o o f customers t o p o p u l a t i o n , and b r i n g s the s t o r e 60% o f i t s t o t a l 16 sales.  S i m i l a r l y , the secondary t r a d e a r e a can be d e f i n e d  as  the a r e a a d j o i n i n g the p r i m a r y t r a d e a r e a , w i t h the n e x t h i g h e s t r a t i o o f customers t o p o p u l a t i o n , from which the s t o r e g e t s  a  s t a t e d amount i n p e r c e n t of i t s s a l e s . The t e r t i a r y ( o r f r i n g e ) t r a d e a r e a would r e p r e s e n t the r e m a i n i n g p o r t i o n s o f the s t o r e ' s 17 trade. C e n t r e S i z e Assumptions i n Trade A r e a D e l i n e a t i o n The p r o c e s s of p r e p a r i n g a d e t a i l e d e v a l u a t i o n of a proposed shopping c e n t r e n e c e s s i t a t e s the appointment of subj e c t i v e judgment a t two  1 4  I b i d . , pp.  27 -  stages.  The f i r s t of these i n v o l v e s  29.  W. Applebaum, "Advanced Methods f o r M e a s u r i n g S t o r e Trade A r e a s and Market P e n e t r a t i o n , " i n K o r n b l a u , op. c l t . , p. 215. 1 6  Ibid.  1 7  Ibid.  the  42 d e l i m i t i n g of the area of e f f e c t i v e a t t r a c t i o n (that i s , the t r a d i n g a r e a o f t h e c e n t r e under a n a l y s i s ) w h i c h n e c e s s i t a t e s an h y p o t h e s i z a t i o n as t o t h e f a c i l i t i e s which t h e c e n t r e w i l l con18 t a i n as t h e b a s i s f o r f u r t h e r s t u d y .  T h e o r e t i c a l l y the types  o f shopping c e n t r e w h i c h m i g h t be b u i l t on a s i t e a r e i n f i n i t e . I n common p r a c t i c e , t h e a n a l y s t s t u d i e s t h e s i t e and t h e l a t e s t p o p u l a t i o n census and b u i l d i n g p e r m i t f i g u r e s , d r i v e s t h r o u g h the t r a d i n g a r e a , l o o k s a t c o m p e t i t i v e  s t o r e s and shopping  c e n t r e s , and t h e n e s t a b l i s h e s a c o n c e p t u a l  image o f what seems  t o him t o be t h e most l i k e l y shopping c e n t r e t h a t could 19 f u l l y be b u i l t upon t h e s i t e .  success-  He b e g i n s w i t h a h y p o t h e t i c a l  c e n t r e w h i c h he guesses might be s u c c e s s f u l ; and t h e r e s t o f h i s r e s e a r c h i s p o i n t e d towards p r o v i n g or d i s p r o v i n g t h i s  hypothesis.  I n o t h e r words, he s e l e c t s a c e r t a i n s i z e range f o r t h e c e n t r e as a s t a r t i n g p o i n t f o r h i s a n a l y s i s .  The o b j e c t o f t h e r e s e a r c h  i s t h e n t o more c l e a r l y d e f i n e t h e optimum s i z e t o match t h e o p t i mum  p o t e n t i a l available to i t .  The a n a l y s i s w i l l prove o r d i s -  p r o v e whether t h e p o t e n t i a l i s i n t h e range assumed, o r e l s e i t i s much s m a l l e r o r l a r g e r .  B u t the p o i n t t o be made h e r e i s t h a t  w i t h o u t some p r i o r i d e a o f how l a r g e a c e n t r e might be and what s o r t o f t e n a n t s i t m i g h t c o n t a i n , i t would be d i f f i c u l t t o b e g i n t o d e l i m i t the t r a d e area f o r t h a t c e n t r e , because i t i s n e c e s s a r y t o know t h e s i z e i n o r d e r t o have some s o r t o f guage o f t h e a t t r a c t i v e power o f t h e c e n t r e w h i c h i s d i r e c t l y r e l a t e d t o t h e s i z e of the trade area.  F o r example, i f a neighbourhood  N e l s o n , op. c i t . , p. 183. I b i d . , p. 186.  centre  43 was  the o n l y s i z e contemplated,  the t r a d e a r e a f o r such a c e n t r e  i s much s m a l l e r than t h a t f o r a r e g i o n a l c e n t r e because i t s a t t r a c t i v e power i s much l e s s t h a n a r e g i o n a l c e n t r e ' s . even a f t e r s t a r t i n g w i t h the assumption  However,  t h a t the s i t e w i l l  c o n t a i n a r e g i o n a l shopping c e n t r e , b e g i n n i n g assumptions t h e range o f p o s s i b l e s i z e s may of trade area a n a l y s i s .  likely as t o  have t o be a l t e r e d i n t h e l i g h t  The p r o c e d u r e f o r making the h y p o t h e s i s  i s t o assume the most l i k e l y s i t u a t i o n o r s i t u a t i o n s w i t h r e s p e c t t o the major s t o r e u n i t s and t h e s i z e o f t h e s i t e , and w i t h i n the l i m i t a t i o n s o f those assumptions, 20 s i z e of the c e n t r e .  then,  t o h y p o t h e s i z e the  I f subsequent a n a l y s i s proves the  s i z e d s i z e should be a l t e r e d , t h e n a new and the a n a l y s i s r e p e a t e d .  hypothe-  size i s hypothesized,  Such a procedure  essentially involves  s u c c e s s i v e l y a p p r o x i m a t i n g the s i z e u n t i l the optimum i s d i s c o v e r e d . I n a sense, i t I n v o l v e s a degree o f c i r c u l a r r e a s o n i n g s i n c e an assumption must be made as t o c e n t r e s i z e b e f o r e an e s t i m a t e o f the p o t e n t i a l can be made a f t e r which t h a t e s t i m a t e may s i z e assumption  cause the  t o be a l t e r e d ; whereas i t would be more d e s i r a b l e  t o a s c e r t a i n a p o t e n t i a l and then t r a n s l a t e t h i s i n t o a s u f f i c i e n t centre s i z e to adequately serve t h i s p o t e n t i a l .  However, t h i s  s u b j e c t w i l l be d i s c u s s e d more t h o r o u g h l y l a t e r i n the t h e s i s . The main p o i n t t o remember i s t h a t d e l i n e a t i n g the t r a d e a r e a r e q u i r e s t h a t an assumption proposed  retail  I b i d . , p.  facility.  188.  be made r e g a r d i n g the s i z e o f the  44 D i f f e r e n t Trade A r e a s f o r D i f f e r e n t M e r c h a n d i s e The problem o f d e l i n e a t i n g t h e t r a d e a r e a f o r t h e shopping c e n t r e as a whole i s compounded by t h e f a c t t h a t t h e t r a d e a r e a f o r each type o f s t o r e i n t h e c e n t r e d i f f e r s a e c o r d 21 ing to are  t o t h e t y p e o f merchandise o f f e r e d :  consumers are w i l l i n g  t r a v e l g r e a t e r d i s t a n c e s t o a c q u i r e c e r t a i n goods than they f o r others.  The supermarket, drug s t o r e s , c l e a n e r s , beauty  and b a r b e r shops w i l l draw customers (on t h e i r own) c h i e f l y from the  immediate neighbourhood.  The major department  draw customers from a much g r e a t e r d i s t a n c e . these t r a d e a r e a s a r e d i f f i c u l t miles or time-distance.  store w i l l  The b o u n d a r i e s o f  t o d e f i n e by a r i g i d f o r m u l a i n  The d i s t a n c e o f a t t r a c t i o n w i l l v a r y  a c c o r d i n g t o f a c t o r s o f a t t r a c t i o n and r e s i s t a n c e , and t h e consumer's a t t i t u d e toward t h e s e f a c t o r s . Necessity f o r R e f i n i n g the D e l i n e a t i o n Procedure In most p r a c t i c a l l o c a t i o n a n a l y s e s , t h e t r a d e a r e a was g e n e r a l l y d e l i n e a t e d s u b j e c t i v e l y , on a t e n t a t i v e b a s i s , so t h a t a n a l y s i s o f that area could begin i n d e t a i l .  There d i d n o t appear  to be any j u s t i f i a b l e , s c i e n t i f i c a l l y a c c u r a t e method f o r d e l i n e a t ing.  I n most cases t h e a n a l y s t a r b i t r a r i l y s e t some l i m i t which  meant d r a w i n g some s o r t o f l i n e around t h e c e n t r e an assumed d i s t a n c e from i t .  I f subsequent a n a l y s i s showed t h e l i n e t o be t o o  c l o s e , t h e a n a l y s t j u s t moved i t f a r t h e r away. In  t h e attempt t o r e f i n e t h i s p r o c e d u r e , v a r i o u s methods  were proposed and employed which s u p p o s e d l y p r o v i d e d some  I b i d . , p. 212.  45 improvement i n a c c u r a c y .  Among these ( a l l of which w i l l  be  examined i n d e t a i l i n P a r t B) t h e most f r e q u e n t l y used i n c l u d e d : 1.  R e i l l y ' s formula  2.  Drawing d r i v i n g t i m e i s o p l e t h s on a  3.  A n a l y z i n g shopping h a b i t s and p r e f e r e n c e s i n c e n t r e s o f comparable s t a t u s and  map  con-  ditions 4.  A n a l y z i n g r e t a i l e x p e n d i t u r e i n comparable locations  5.  Drawing c o n c e n t r i c r i n g s o r p r o b a b i l i t y c o n t o u r s on a  6.  map  Applying theoretical  formulas  In a l l o f t h e s e , assumptions were made r e g a r d i n g consumer b e h a v i o u r , o r t h e way  consumers a c t as a consequence o f  t h e i r p e r c e p t i o n o f (and a t t i t u d e towards) v a r i o u s a t t r a c t i o n resistance factors. and the way  Only t h r o u g h u n d e r s t a n d i n g these f a c t o r s  they a f f e c t consumer b e h a v i o u r and a t t i t u d e s , can  any  m e a n i n g f u l e s t i m a t e o f the e x t e n t o f the t r a d e a r e a be made. B r i e f l y , some o f t h o s e f a c t o r s a f f e c t i n g the s i z e and shape o f the t r a d e a r e a i n c l u d e :  the convenience  t h e s i z e of t h e c e n t r e ; the t y p e s o f merchandise tre;  o f the l o c a t i o n ; s o l d i n the cen-  t h e manner i n which t h e y are s o l d ; the shopping h a b i t s o f  t h e customers; the l o c a t i o n o f e x i s t i n g c o m p e t i t i o n ; the p o p u l a t i o n d e n s i t y ; the e x i s t e n c e o f unpopulated  zones; n a t u r a l and man-made  b a r r i e r s ; the p r o x i m i t y t o the c e n t r a l b u s i n e s s d i s t r i c t ;  the  ease o f a c c e s s t o t h e l o c a t i o n ; t r a f f i c p a t t e r n s ; and the n a t u r e Of t h e l o c a t i o n .  A more comprehensive  f o l l o w s i n the next chapter.  d i s c u s s i o n of these f a c t o r s  46 Summary T h i s c h a p t e r has b r i e f l y examined t h e importance o f the  t r a d e a r e a concept and d i s c u s s e d t h e problems i n h e r e n t i n  measuring i t , both i n terms o f i t s p h y s i c a l s i z e and i t s monetary size.  I t was observed t h a t t h e e x t e n t o f a r e t a i l  centre's area  of i n f l u e n c e ( t r a d e a r e a ) i s l a r g e l y determined by how consumers r e a c t t o v a r i o u s f a c t o r s o f a t t r a c t i o n and r e s i s t a n c e .  To more  a c c u r a t e l y a s s e s s t h e p o t e n t i a l e x i s t e n t f o r a proposed  retail  o u t l e t , i t i s t h e r e f o r e necessary to understand both the f a c t o r s t h a t a f f e c t consumer b e h a v i o u r and how consumers t y p i c a l l y t o them, a s u b j e c t t o which t h e n e x t c h a p t e r i s d e v o t e d .  react  CHAPTER IV BASIC FACTORS AND RELATIONSHIPS I N THE MEASUREMENT OP TRADE AREA POTENTIAL Introduction B e f o r e t u r n i n g t o t h e p r a c t i c a l methods and  theoretical  models which have been developed t o a i d i n the assessment l o c a t i o n p o t e n t i a l , i t i s n e c e s s a r y f i r s t t o examine and  of under-  stand t h o s e f a c t o r s a f f e c t i n g l o c a t i o n p o t e n t i a l , I n c l u d i n g t h o s e which a f f e c t consumer b e h a v i o u r i n the s e l e c t i o n o f a shopping l o c a t i o n , s i n c e such f a c t o r s s h o u l d be r e c o g n i z e d and i n c l u d e d i n any model o r method which p u r p o r t s to be a b l e t o a c c u r a t e l y and c o n s i s t e n t l y p r e d i c t both the expected consumer p a t r o n a g e and the c o r r e s p o n d i n g s a l e s volume p o t e n t i a l a t a p a r t i c u l a r location.  Having once examined the importance of such f a c t o r s ,  i t remains t o be determined i n Chapber VI whether they are i n c l u d e d as v a r i a b l e s i n t h e c o n c e p t u a l s t r u c t u r e o f the models, and i n Chapter V whether t h e y a r e e x p l i c i t l y  i n c l u d e d i n the  a n a l y t i c a l p r o c e d u r e o f t h e v a r i o u s methods. When a n a l y z i n g the v a r i o u s models and methods, i t s h o u l d be remembered t h a t t h e y are based on the premise t h a t consumer s p a t i a l b e h a v i o u r i s p r i m a r i l y determined by t h e o p e r a t i o n o f the f o r c e s o f a t t r a c t i o n and r e s i s t a n c e as r e l a t e d t o competing retail  centres: A l l r e t a i l t r a n s a c t i o n s are t h e r e s u l t o f I n d i v i d u a l c h o i c e s based upon p r e f e r e n c e s of one type o r a n o t h e r . Such c h o i c e s r e g a r d i n g where t o shop are t h e r e s u l t o f  48 I n d i v i d u a l r e a c t i o n s t o the f a c t o r s o f a t t r a c t i o n and r e s i s t a n c e as r e l a t e d t o a v a i l a b l e shopping f a c i l i t i e s . 1  Market F a c t o r s Economic  Outlook  S i n c e most l o c a t i o n a n a l y s e s attempt  to provide a sales  volume e s t i m a t e f o r a date s e v e r a l y e a r s i n the f u t u r e , the economic o u t l o o k f o r the r e g i o n can have an i m p o r t a n t b e a r i n g on the p o t e n t i a l s a l e s a t t h a t date f o r a p a r t i c u l a r l o c a t i o n . The economic h i s t o r y o f the a r e a must be s t u d i e d t o ensure t h a t growth has o c c u r r e d , w i l l c o n t i n u e t o o c c u r , and t h a t economic 2 h e a l t h i s improving r a t h e r than d e c l i n i n g .  Normally,  this  economic a n a l y s i s s h o u l d c o v e r the whole r e g i o n of which the p a r t i c u l a r t r a d e a r e a under a n a l y s i s i s a p a r t .  The t r a d e a r e a  i t s e l f s h o u l d be a n a l y z e d t o ensure t h a t i t i s not a d e c l i n i n g area.  S i n c e the economic l i f e o f a shopping  centre i s l i k e l y to  be twenty o r more y e a r s , the owners need t o have an understanding  informed  r e g a r d i n g the economic c o n d i t i o n s t h a t are l i k e l y  t o a f f e c t t h e i r c e n t r e over i t s l i f e t i m e . the v a l u e o f m a n u f a c t u r i n g  Economic d a t a such  as  o u t p u t , the l i f e - c y c l e o f i n d u s t r y ,  f a m i l y income l e v e l s , l a n d v a l u e s (and t r e n d s ) , c o n s t r u c t i o n a c t i v i t i e s , development of u t i l i t i e s , employment s t a t i s t i c s  and  t r e n d s , p o p u l a t i o n growth t r e n d s , and r e t a i l volume t r e n d s a l l p r o v i d e i m p o r t a n t c l u e s t o the h e a l t h and s t a g e i n the l i f e - c y c l e o f any a r e a as w e l l as i n d i c a t i o n s f o r p r e s e n t and f u t u r e I b i d . , pp. 184 - 5. Kane, op. c i t . , p.  17.  49 p u r c h a s i n g power t r e n d s .  The r e l a t i o n s h i p h e r e i s e v i d e n t :  the h e a l t h i e r the economy, the more b u s i n e s s a v a i l a b l e t o 3 c e n t r e s i n the a r e a , b o t h today and i n the f u t u r e .  shopping  Obviously, a  good s i t e r e q u i r e s a t l e a s t maintenance of s a t i s f a c t o r y economic h e a l t h i n an a r e a f o r some t i m e , and p r e f e r a b l y an  improving  c l i m a t e which w i l l improve the c e n t r e ' s economic p r o s p e c t s . Population H i s t o r i c a l l y s p e a k i n g , the l i t e r a t u r e has emphasized t h a t the volume o f r e t a i l  repeatedly  s a l e s , and t h e r e t a i l  floor  space i n an a r e a a r e d i r e c t l y r e l a t e d t o the s i z e o f t h e p o p u l a t i o n i n that area. tor,  They emphasize t h a t more than any o t h e r f a c -  p o p u l a t i o n i s the s i n g l e most i m p o r t a n t r e t a i l  sales  predictor. The number, d i s t r i b u t i o n , c o m p o s i t i o n , d e n s i t y , growth p a t t e r n , income, e x p e n d i t u r e s , and b u y i n g h a b i t s o f the p o p u l a t i o n 4 a l l must be c o n s i d e r e d when e s t i m a t i n g t o t a l market p o t e n t i a l . T h i s i n f o r m a t i o n i s e s s e n t i a l i n computing p u r c h a s i n g power and sales estimates. The proposed c e n t r e ( a l l o t h e r t h i n g s b e i n g e q u a l )  should  be l o c a t e d a t a s i t e which l i e s a t the c e n t r e o f the g r e a t e s t c o n c e n t r a t i o n o f consumer e x p e n d i t u r e s w i t h i n the t r a d e a r e a .  It  i s e x t r e m e l y u s e f u l t o p l o t much of t h i s d a t a on maps i n o r d e r t o facilitate  the a n a l y s i s .  I b i d . , p.  There i s no more a c c u r a t e and  consistently  22.  S a u l B. Cohen and ¥. Applebaum, "Major C o n s i d e r a t i o n s i n E v a l u a t i n g a S t o r e S i t e , " i n K o r n b l a u , op. c l t . , p. 86.  50 u s e f u l t o o l t h a n the dot map map  of p o p u l a t i o n d i s t r i b u t i o n .  i s a k i n d of photograph of p o p u l a t i o n , and  This  can be made t o  show not o n l y t h e p r e c i s e l o c a t i o n of e x i s t i n g p o p u l a t i o n , a l s o the a e r i a l changes i n p o p u l a t i o n t h a t have o c c u r r e d l i k e l y t o o c c u r d u r i n g a s t a t e d p e r i o d of  but  or  are  time.  P o p u l a t i o n d i s t r i b u t i o n , l i k e an economy, i s n o t a 5 phenomenon. and  static  The f o r c e s of b i r t h , d e a t h , p r o s p e r i t y , p o v e r t y ,  the economic l i f e - c y c l e of the a r e a combine t o e i t h e r s w e l l  o r d e p l e t e p o p u l a t i o n i n an a r e a .  Where, how  l o n g , and  t o what  e x t e n t p o p u l a t i o n changes have been o c c u r r i n g are o f paramount concern to l o c a t i o n a n a l y s t s .  Why  t h e y are o c c u r r i n g s h o u l d  p a r t i a l l y or f u l l y i n v e s t i g a t e d i n a f u l l  study o f the  be  area  economy. New  r e s i d e n t i a l b u i l d i n g t r e n d s must be a n a l y z e d  d e t e r m i n e where new new  to  c o n s t r u c t i o n i s l i k e l y t o o c c u r , o r where  t r a c t s of l a n d f o r h o m e s i t e s are a v a i l a b l e .  T h i s new  s t r u c t i o n w i l l add p o p u l a t i o n i n a r e a s p r e s e n t l y l e s s  con-  populated.  The proposed s i t e s h o u l d be c l o s e enough t o t h i s c o n s t r u c t i o n t o s e r v e the p o p u l a t i o n growth expected t h e r e . caution i s necessary. suburban area may  But a degree of  L o c a t i n g a c e n t r e i n a r a p i d l y growing  seem on the s u r f a c e t o be an e x c e l l e n t i d e a .  N a t u r a l l y , the d e s i r a b l e t r e n d i s t o l o c a t e i n a r e a s of g r o w i n g p o p u l a t i o n , but an a d d i c t i o n t o growth areas can be dangerous and 6 short-sighted. A n a l y s i s must be conducted t o determine i f the expected growth i n s a l e s p r o j e c t e d to a r i s e as a r e s u l t o f 7 supposed p o p u l a t i o n growth w i l l i n f a c t take p l a c e . For example, Kane, op. c i t . , p. 6  I b i d . , p.  42.  7  I b i d . , p.  43.  40.  51 a c e n t r e may  be proposed f o r an o u t l y i n g suburban a r e a on  edge o f a major c i t y , developed  I t may  the  be f e l t t h a t the c e n t r e s h o u l d  be  on a s u f f i c i e n t s c a l e t o take advantage o f a n t i c i p a t e d  p o p u l a t i o n and s a l e s growth, and t h a t the c e n t r e w i l l not r e a l i z e i t s f u l l s a l e s p o t e n t i a l f o r a number o f y e a r s u n t i l t h i s pated growth t a k e s p l a c e .  However, a n a l y s i s may  antici-  show t h a t the  c e n t r e w i l l remain e c c e n t r i c , not c e n t r a l , t o the c e n t r e o f the population.  F o r example, the g r e a t e s t p r o p o r t i o n of t h e p o p u l a -  t i o n growth may  o c c u r on one  s i d e o f the proposed s i t e w i t h  v a c a n t h o m e s i t e s b e i n g f i l l e d I n r a p i d l y , whereas on the o t h e r s i d e , homebuilding  may  be r e s t r i c t e d because o f poor s o i l  t i o n s or zoning r e s t r i c t i o n s .  condi-  So, even though the p o p u l a t i o n o f  the immediate a r e a i s p r o j e c t e d t o i n c r e a s e by a s u b s t a n t i a l percentage,  care must be t a k e n t o ensure t h a t the proposed c e n t r e  i s n o t l o c a t e d on the o u t e r f r i n g e o f t h i s growth.  I t should  i n s t e a d l o c a t e between t h i s growth a r e a and a l r e a d y b u i l t - u p areas. new  I n f a c t , the new  c e n t r e s h o u l d be l o c a t e d between t h i s  growth a r e a and any e x i s t i n g c o m p e t i t i v e r e t a i l  In  t h i s way  to  the e x i s t i n g f a c i l i t i e s .  facilities.  i t w i l l i n t e r c e p t b u s i n e s s which would o t h e r w i s e 8 Furthermore,  i f the new  not l o c a t e i n t h i s f a s h i o n , i t i s p o s s i b l e t h a t new f a c i l i t i e s w i l l be developed i n t e r c e p t the b u s i n e s s .  c e n t r e does  competing  t h e r e i n s t e a d which w i l l  themselves  T h i s i l l u s t r a t e s the danger o f l o c a t i n g  on the f r i n g e o f a p o p u l a t e d a r e a , e s p e c i a l l y when t h e r e are s i t e s a v a i l a b l e on which c o m p e t i t o r s may centres.  go  develop  still  competing  By s t u d y i n g p o p u l a t i o n d i s t r i b u t i o n maps w i t h an  S a u l B. Cohen and ¥. Applebaum, "Major C o n s i d e r a t i o n i n E v a l u a t i n g a S t o r e S i t e , " I n K o r n b l a u , op. c l t . , p. 87.  eye  52 t o a r e a growth t r e n d s , highway developments, and p o s s i b l e c o m p e t i t i v e s i t e s , the h a z a r d  new  of b e i n g s h o r t - c i r c u i t e d can  be  reduced. P o p u l a t i o n w i t h i n the t r a d e a r e a should be  considered  i n terms o f f a m i l i e s , s i n c e the p o p u l a t i o n count i s used i n c o n j u n c t i o n w i t h the c a l c u l a t i o n of e x p e n d i t u r e t a k e n from a f a m i l y e x p e n d i t u r e The  on r e t a i l goods  survey.  f i r s t step i s t o a r r i v e a t an a c c u r a t e count of the  p o p u l a t i o n r e s i d i n g i n the t r a d e a r e a and t o a s s i g n i t t o the v a r i o u s segments o f t h a t t r a d e a r e a .  The most a c c u r a t e method  i s an a c t u a l count of d w e l l i n g u n i t s , made by c o u n t i n g p h y s i c a l s t r u c t u r e s f o r s i n g l e f a m i l y houses and m a l l boxes f o r m u l t i p l e dwellings.  I n a c t u a l count i s v i r t u a l l y always n e c e s s a r y  new  shopping c e n t r e because the s u r r o u n d i n g  one  of r e c e n t r e s i d e n t i a l g r o w t h , and  s t a t i s t i c s w i l l be v e r y i n a c c u r a t e .  for a  a r e a i s l i k e l y t o be  available population I f population  statistics  are a v a i l a b l e i n enough d e t a i l , t h e s e can be used I n s t e a d w h i c h , of c o u r s e , i s l e s s c o s t l y .  P o p u l a t i o n can be determined  by:  counting b u i l d i n g permits, t a k i n g a e r i a l photographs, r e f e r r i n g t o the l a s t census and a d j u s t i n g I t . P o p u l a t i o n f i g u r e s are t h e n analyzed  according t o : 1.  Number of f a m i l i e s .  2.  Age-sex r a t i o s , e i t h e r i n t o t a l numbers o r  3.  p e r 1,000  population, with c l a s s i f i c a t i o n  major age  groups.  by  The number of p e r s o n s p e r f a m i l y .  Changes i n p o p u l a t i o n o c c u r through n a t u r a l i n c r e a s e o r d e c r e a s e or through m i g r a t i o n .  The p o p u l a t i o n f i g u r e s must be  updated i f they are t o be u s e f u l a t a l l .  S e v e r a l methods are  53  used such as:  h i r t h - d e a t h r a t e s , i n and  d w e l l i n g u n i t s i n c o n s t r u c t i o n and  out m i g r a t i o n ,  new  the p a s t growth r a t e (however,  the s t r a i g h t - l i n e p r o j e c t i o n of p o p u l a t i o n growth r e q u i r e s  an  assumption t h a t the many f o r c e s c o n t r i b u t i n g t o p o p u l a t i o n  change  9  w i l l remain  constant).  I n many cases p r o j e c t i o n s are a v a i l a b l e from p r i v a t e planning  o f f i c e s or u n i v e r s i t y research  j e c t i o n s may  be v e r y a c c u r a t e  nevertheless  be s t u d i e d .  or i n c r e d i b l y wrong but  should  Only s h o r t term p r o j e c t i o n s , o f f i v e  y e a r s o r l e s s can be made w i t h any should  departments - these p r o -  confidence.  This  statement  not be d i s t u r b i n g , because f o r the l o c a t i o n a n a l y s t i t  i s not as c r i t i c a l t o know e x a c t l y how e x a c t l y where s i g n i f i c a n t p o p u l a t i o n growth a r e a s can be d e t e c t e d  much as i t i s t o know  change w i l l o c c u r .  by g o i n g t o the M u n i c i p a l  Potential Assessors  O f f i c e and f i n d i n g out where l a n d i s b e i n g p l o t t e d f o r f u t u r e r e s i d e n t i a l development.  P l a n s f o r the e x t e n s i o n  of p u b l i c  u t i l i t i e s such as w a t e r , sewage and gas l i n e s can p r o v i d e l o n g e r range c l u e t o growth  areas.  an even  1 0  Income I n any t r a d i n g a r e a the p o p u l a t i o n must be f i r s t and  determined  then the average income f o r t h a t p o p u l a t i o n  determined,  s i n c e these two v a r i a b l e s i n d i c a t e the t o t a l number o f d o l l a r s a v a i l a b l e i n t h a t t r a d e a r e a f o r consumption e x p e n d i t u r e s .  By  a p p l y i n g some k i n d o f an average f o r the p e r c e n t a g e e x p e n d i t u r e  Kane, op. I b i d . , p.  c l t . , p. 55.  47.  54 for  each type o f merchandise i t i s p o s s i b l e t o a s c e r t a i n the  t r a d e a r e a p o t e n t i a l spending power f o r eaoh type o f m e r c h a n d i s e . ( T h i s t h e s i s w i l l not be concerned  with discussing  d e t a i l e d p r a c t i c a l problems i n d a t a c o l l e c t i o n . be concerned and why  Rather i t w i l l  w i t h what t y p e s of i n f o r m a t i o n should be a s c e r t a i n e d  t h a t i n f o r m a t i o n s h o u l d be The p r i n c i p l e importance  ascertained.) o f a s c e r t a i n i n g income l e v e l s  w i t h i n the t r a d e a r e a i s t h e i r use as a p a r t o f the d e t e r m i n a t i o n p r o c e s s I n v o l v i n g the l i k e l y  f u t u r e shopping  p a t t e r n s of area r e s i d e n t s .  In o t h e r words, i t i s w e l l known t h a t  a c e r t a i n percentage shopping  centre  expenditure  o f p e r s o n a l d i s p o s a b l e income i s spent  centre-type merchandise.  Determining  on  the p e r - c a p i t a  Income then enables the r e s e a r c h e r to a s c e r t a i n the d o l l a r v a l u e for  t h a t percentage  n o r m a l l y spent on shopping  centre merchandise.  Every p o p u l a t e d a r e a has a c e r t a i n l e v e l of p e r s o n a l income, and t h i s l e v e l has a d i r e c t r e l a t i o n s h i p t o the amount 11 people see how  spend f o r v a r i o u s p r o d u c t s o f a l l t y p e s .  I n o r d e r to  the v a r y i n g p a t t e r n o f income l e v e l s r e l a t e s t o a p r o -  posed l o c a t i o n , the a n a l y s t should c o n s t r u c t an income  map.  F o r each c l o s e - i n segment i n the t r a d i n g a r e a , a t a b l e s h o u l d be p r e p a r e d and income.  showing the breakdown o f f a m i l i e s by  size  These d a t a can be secured from a sample o f the  p o p u l a t i o n through an i n t e r v i e w i n g t e c h n i q u e . from the proposed s i t e ,  I n areas  farther  an average f a m i l y s i z e , and an average  income f i g u r e f o r t h a t segment i s u s u a l l y adequate, though i t i s s u b j e c t , o f c o u r s e , t o somewhat g r e a t e r e r r o r because an average may  r e p r e s e n t e i t h e r many f a m i l i e s r o u g h l y s i m i l a r i n  I b i d . , p.  57.  55 income o r s i z e o r two groups o f f a m i l i e s c o n s i d e r a b l y d i f f e r e n t I n income o r s i z e .  The average f a m i l y income can u s u a l l y be  taken from t h e l a t e s t census and then a d j u s t e d f o r income changes S i n c e t h a t d a t e .  I n f o r m a t i o n may a l s o be a v a i l a b l e  from t h e l o c a l p l a n n i n g commission, c i t y p l a n n i n g commissions, employment o f f i c e s , and v a r i o u s p u b l i c a t i o n s .  I n new growth  a r e a s , spot a p p r a i s a l s can be made showing t h e r e l a t i o n s h i p between d w e l l i n g v a l u e and income.  Only i n v e r y h i g h l y t r a n s i e n t  o r r e t i r e m e n t areas a r e t h e r e l i k e l y t o be v e r y wide d i s c r e p a n c i e s . I n an apartment a r e a , r e n t l e v e l s a r e a good I n d i c a t i o n .  I n any  event, spot i n t e r v i e w s c o u l d be made i n some o f t h e o u t l y i n g a r e a s , w i t h more comprehensive i n t e r v i e w i n g b e i n g conducted i n c l o s e - i n areas.  To a s c e r t a i n whether t h e l o c a l i t y under study  shows v a r i a t i o n s from t h e n a t i o n a l average,  checks s h o u l d be made  w i t h any r e g i o n a l department o r newspaper o r any o t h e r p e r s o n o r p e o p l e who may have c a r r i e d o u t s i m i l a r market r e s e a r c h p r e v i o u s l y . Employment The a n a l y s i s o f employment w i t h i n t h e r e g i o n o f t h e t r a d e a r e a l i n k s p o p u l a t i o n f i g u r e s w i t h income e x p e n d i t u r e , s i n c e t h e f u t u r e spending power a v a i l a b l e t o a new c e n t r e w i l l be r e l a t e d t o these f a c t o r s . shopping  shopping  F o r major r e g i o n a l  c e n t r e s w i t h a l a r g e t r a d e a r e a , a wide range o f l o c a l  f a c t o r s w i l l a f f e c t t h e e x i s t i n g employment s t r u c t u r e ( f o r example, a d i v e r s i f i e d employment s t r u c t u r e , o r a h i g h l y s p e c i a l i z e d one, as i n t h e case o f a l a r g e motor v e h i c l e manufacturing centre).  S e v e r a l o t h e r f a c t o r s s h o u l d be c o n s i d e r e d  when a n a l y z i n g employment:  56 1.  Unemployment - account should be t a k e n o f l o c a l employment p r o j e c t i o n s , and c o n s i d e r a t i o n g i v e n t o such f a c t o r s as s e a s o n a l o r emerging permanent unemployment a r i s i n g from the c l o s i n g o f an industry. 1 2  2.  C h a r a c t e r o f employment - a count must be t a k e n o f the i n c i d e n c e o f s h i f t work, i n c l u d i n g the h o u r s worked, s i n c e these may a f f e c t l o c a l shopping h o u r s . The i n c i d e n c e o f female workers s h o u l d a l s o be s t u d i e d , s i n c e these consumers may be o b l i g e d t o shop a t u n u s u a l h o u r s o r c l o s e t o t h e i r p l a c e of work.3-3  3.  F u t u r e l o c a t i o n o f i n d u s t r y - major new i n d u s t r i e s under c o n s t r u c t i o n and those f o r which p l a n n i n g p e r m i s s i o n has a l r e a d y been g r a n t e d s h o u l d be assessed i n terms o f t y p e , l o c a t i o n , and number and type of workers. ^ 1  P u r c h a s i n g Power ( D i s p o s a b l e Income) The volume of r e t a i l t r a d e i s as much dependent on the wealth of a d i s t r i c t  o r community as upon i t s p o p u l a t i o n .  There  i s a s t r o n g c o r r e l a t i o n between the p u r c h a s i n g power f o r an and the r e t a i l  sales figures f o r that area.  The o b v i o u s  area  explana-  t i o n f o r t h i s i s t h a t w i t h more money t o spend, more money w i l l be spent on r e t a i l goods.  T h e r e f o r e , a s c e r t a i n i n g the t o t a l  p u r c h a s i n g power w i l l p r o v i d e a good p r e d i c t o r o f t h e amount o f retail  s a l e s t o be expected from t h a t p o p u l a t i o n . The amount o f money a v a i l a b l e i n the t r a d i n g a r e a f o r  v a r i o u s t y p e s o f goods depends upon the income l e v e l o f the a r e a ,  I b i d . , pp. 20 - 22.  1 2  l ^  C o l i n S. Jones, R e g i o n a l Shopping C e n t r e s : T h e i r L o c a t i o n , P l a n n i n g , and D e s i g n , London. England. B u s i n e s s Books L t d . . 1969, p. 39. I b i d . , p. 69. J  1 4  57 Once the income l e v e l has "been a s c e r t a i n e d , i t s h o u l d be p o s s i b l e to  c a l c u l a t e t h e p o t e n t i a l f o r each p r o d u c t - t y p e . T o t a l annual t r a d e a r e a r e t a i l e x p e n d i t u r e s f o r each  p r o d u c t - t y p e are n o r m a l l y c a l c u l a t e d by m u l t i p l y i n g the income of f a m i l i e s i n s i m i l a r income groups by the average r e t a i l e x p e n d i t u r e p e r c e n t a g e f a c t o r f o r each p r o d u c t - t y p e p u b l i s h e d by a government agency which g i v e s e x p e n d i t u r e f a c t o r s f o r each p r o d u c t - t y p e ) . c a l c u l a t i o n could proceed:  (commonly  percentage-of-income F o r example, the  number o f f a m i l i e s , m u l t i p l i e d  by  medium f a m i l y income f o r t h a t income group, m u l t i p l i e d by the percentage  expenditure f a c t o r f o r a p a r t i c u l a r product-type  equals the r e t a i l expenditure f o r a p a r t i c u l a r product-type. p r e c e e d i n g a n a l y s i s i s i n t e n d e d t o show two t h i n g s :  The  1) the t o t a l  r e t a i l e x p e n d i t u r e i n the a r e a f o r a l l goods, and 2) the t o t a l r e t a i l e x p e n d i t u r e f o r each type o f good.  These e x p e n d i t u r e  p a t t e r n s can v a r y a c c o r d i n g t o d i f f e r e n c e s i n p r i c e s , v a r i a t i o n s i n shopping h a b i t s , and d i f f e r e n c e s i n Income l e v e l s . Income l e v e l s , the percentage  At lower  of f a m i l y d i s p o s a b l e Income spent  on c e r t a i n h i g h e r - p r i c e d "shopping" goods such as f u r n i t u r e a p p l i a n c e s may  be d i f f e r e n t than t h a t f o r h i g h e r - i n c o m e  However, s a l e s o f convenience  and  families.  i t e m s are not a f f e c t e d t o any g r e a t  degree by d i f f e r e n c e s i n f a m i l y income l e v e l s .  These are goods,  such as f o o d , t h a t are r e q u i r e d d a i l y as n e c e s s i t i e s , and t h e r e i s a minimum amount which must be purchased f a m i l y income l e v e l .  r e g a r d l e s s o f the  Sometimes income v a r i a t i o n s w i t h i n a t r a d i n g  a r e a can be a s c e r t a i n e d by d r i v i n g t h e t r a d i n g a r e a and n o t i n g the 15 d i f f e r e n c e i n housing c o n d i t i o n s . Knowing the g e n e r a l annual •  K a n e  » op«  c l t . , p.  60.  58 income l e v e l f o r the t r a d i n g a r e a , and knowing the p e r c e n t a g e expenditure  spent on each p r o d u c t - t y p e ,  the p o t e n t i a l can  a d j u s t e d above o r below a p a r t i c u l a r e x p e n d i t u r e l e v e l to whether h o u s i n g  he  according  c o n d i t i o n s are above o r below a v e r a g e .  Averages are o f t e n u s e f u l when working w i t h thousands of hence an average income t r a n s l a t e d I n t o an average  people,  expenditure  produces an e s t i m a t e o f t o t a l p o t e n t i a l t h a t can o f t e n be 16 upon.  relied  Once the p o t e n t i a l o f the whole t r a d i n g a r e a has been  determined,  i t i s s a f e t o s u b d i v i d e the a r e a a c c o r d i n g t o s i g n i -  f i c a n t v a r i a t i o n s i n e x p e n d i t u r e p o t e n t i a l t h a t are  apparent.  Distance u  D i s t a n c e t a k e s time,** c o s t s money, and tends t o I n h i b i t  consumer shopping movements.  I t i s s a i d t h a t people would p r e f e r  to buy the g r e a t m a j o r i t y of t h e i r goods n e a r t h e i r homes i f t h e y were a b l e t o do so.  The g r e a t e r the d i s t a n c e , the g r e a t e r 17  must be t h e a t t r a c t i o n t o p u l l t r a d e . A.  D i s t a n c e as a T r a v e l C o s t Among the f a c t o r s t h a t have been f r e q u e n t l y mentioned  as a f f e c t i n g the s p a t i a l p a t t e r n s o f consumer b e h a v i o u r , c o s t s have p r o b a b l y r e c e i v e d p r i n c i p a l c o n s i d e r a t i o n . a consumer's t r a v e l b e h a v i o u r  travel  Clearly,  i s i n f l u e n c e d by the expense, i n  time and e f f o r t as w e l l as money, t h a t he p e r c e i v e s t o be i n v o l v e d i n s e l e c t i n g among v a r i o u s r e t a i l c e n t r e s o f f e r i n g goods and s e r v i c e s d e s i r e d .  1 6  17  the  These a n t i c i p a t e d c o s t s o f t r a v e l l i n g ,  Ibid.  P.D. Converse, R e t a i l Trade A r e a s i n I l l i n o i s , Urbana, U n i v e r s i t y o f I l l i n o i s P r e s s , 1946, p. 13.  59 the time and e f f o r t I n v o l v e d i n p r e p a r i n g f o r and a c t u a l l y making t h e t r i p , a r e regarded  as e x e r t i n g a f o r c e t h a t c o n t r a c t s  the d i s t a n c e s consumers t r a v e l t o s a t i s f y t h e i r needs.  With  I n c r e a s i n g d i s t a n c e from t h e c e n t r e , t h e consumer p e r c e i v e s h i s cost i n v i s i t i n g that centre w i l l increase sharply. f l e c t s the existence of opportunity cost:  This r e -  w i t h o n l y so much  time t o devote t o any number o f a c t i v i t i e s i n a g i v e n p e r i o d , too much time spent i n t h e p u r s u i t o f one a c t i v i t y h a s t o be r e a l i z e d a t t h e expense o f o t h e r  activities.  T r i p f r e q u e n c i e s tend t o d e c l i n e as t h e d i s t a n c e r e q u i r e d t o make t h e t r i p i n c r e a s e s .  Conversely,  tend t o be l o w e r as t r i p f r e q u e n c i e s I n c r e a s e .  trip  distances  The most o b v i o u s  r e a s o n f o r t h i s i n v o l v e s t r a v e l c o s t s which o c c u r because t h e r e i s a f r i c t i o n component o f space t h a t can o n l y be overcome by the e x p e n d i t u r e  o f time and e f f o r t .  The e f f e c t o f t h i s  friction  i s t o r e s t r i c t t r a v e l d i s t a n c e s i n the i n t e r e s t o f l i m i t i n g  travel  costs. B.  D i s t a n c e i n D r i v i n g Time The dependence o f many l a r g e suburban r e g i o n a l c e n t r e s  on t h e m o t o r i z e d  shopper has l e d i n c r e a s i n g l y t o t h e d e f i n i t i o n  of t r a d e a r e a b o u n d a r i e s s o l e l y i n terms o f d r i v i n g t i m e .  The  e a r l y u s e o f t h e c o n c e n t r i c r i n g t e c h n i q u e has now l a r g e l y been r e p l a c e d by t h e i s o c h r o n o r i s o p l e t h method, w i t h c o n t o u r  lines  l i n k i n g p l a c e s o f equal d r i v i n g time from t h e s u b j e c t l o c a t i o n . This technique  i s i n answer t o t h e o b s e r v a t i o n t h a t d i s t a n c e i n  m i l e s does n o t a d e q u a t e l y experienced  by consumers.  represent  t h e degree o f  inconvenience  F o r example, a f i v e m i l e d r i v e on  t h e freeway r e q u i r e s f a r l e s s time and e f f o r t and f r u s t r a t i o n  60 t h a n a d r i v e o f t h e same d i s t a n c e through  congested  city  traffic.  T r a v e l time i s thought t o p r o v i d e a b e t t e r i n d i c a t i o n o f t r a v e l c o s t s as p e r c e i v e d by t h e consumer. Normally  s p e a k i n g , most shopping  c e n t r e d e v e l o p e r s when  d e f i n i n g t h e e x t e n t o f t h e i r proposed t r a d e a r e a ,  arbitrarily  assume a c e r t a i n d r i v i n g time d i s t a n c e from t h e c e n t r e .  I n most  cases t h e r e i s no p a r t i c u l a r j u s t i f i c a t i o n g i v e n f o r the c h o i c e o f a p a r t i c u l a r d r i v i n g time d i s t a n c e , except t o say t h a t i t i s based on " e x p e r i e n c e " a i d e d by i n t u i t i o n as t o t h e maximum d i s tance w i t h i n which consumers w i l l be a t t r a c t e d t o t h e c e n t r e . E s t i m a t e s o f t h e maximum d r i v i n g time commonly range from t e n m i n u t e s t o over an h o u r depending on t h e l o c a t i o n , a range which l e a d s one t o s u s p e c t t h a t t h e c h o i c e o f any one p a r t i c u l a r d r i v i n g time i s l i k e l y t o be open t o c o n s i d e r a b l e q u e s t i o n .  I n many  cases t h e l i m i t chosen i s based on t h e p r o x i m i t y o f competing retail  facilities,  and t h e l i m i t s e t a t t h e p o i n t where i t i s  assumed t h a t t h e s u b j e c t t r a d e a r e a f l a n k s t h e t r a d e areas o f other centres.  However, even i n t h i s assumption t h e r e i s s t i l l  no j u s t i f i c a t i o n f o r s e l e c t i n g one time l i m i t over another as the p o i n t where consumers cease t o be a t t r a c t e d t o t h e s u b j e c t centre.  T h i s s u b j e c t w i l l be d i s c u s s e d I n g r e a t e r d e t a i l  later  i n Chapter V, b u t f o r t h e time b e i n g i t w i l l s u f f i c e t o n o t e t h a t the problem o f a s c e r t a i n i n g how d i s t a n c e a f f e c t s consumer s p a t i a l behaviour  i s r e a l l y a q u e s t i o n o f a s c e r t a i n i n g what t r a v e l  costs  consumers a r e w i l l i n g t o s u s t a i n i n t h e p u r s u i t o f shopping s a t i s f a c t i o n - and q u a n t i f y i n g an answer t o t h i s q u e s t i o n remains the g r e a t e s t s t u m b l i n g b l o c k i n l o c a t i o n r e s e a r c h  today.  61 C.  D i s t a n c e v s . Merchandise D e s i r e d E a r l y w r i t e r s recognized  t h a t t h e t y p e o f merchandise  sought by t h e consumer had a marked e f f e c t on t h e d i s t a n c e he was w i l l i n g t o t r a v e l t o a c q u i r e i t .  R e i l l y noted t h a t :  l e a d i n g s t y l e and s p e c i a l t y s t o r e s . . . h a n d l e l i n e s o f merchandise t h a t p e o p l e are w i l l i n g t o t r a v e l some d i s t a n c e t o secure .1° Consumer p e r c e p t i o n o f t r a v e l c o s t s i s a s s o c i a t e d w i t h rewards a r i s i n g from t h e s a t i s f a c t i o n o f f u l f i l l i n g a need f o r v a r i o u s goods and s e r v i c e s .  These rewards v a r y i n degree a c c o r d i n g t o  the type o f merchandise sought.  Such rewards can e x e r t an i n -  f l u e n c e which tends t o l e n g t h e n t h e d i s t a n c e a consumer i s w i l l i n g to t r a v e l . balance  Thus t h e r e i s a tendency f o r t h e consumer t o  t h e a t t r a c t i o n o f rewards a r i s i n g from h i g h e r degrees o f  s a t i s f a c t i o n a g a i n s t a tendency t o economize on t r a v e l c o s t s . I t i s assumed t h a t i n making a t r i p t h e consumer seeks t o keep i t as s h o r t as p o s s i b l e i n order to avoid higher costs than are necessary. On t h e o t h e r hand, t h e t r i p has a d e f i n i t e r e a s o n f o r b e i n g made, namely some r e q u i r e m e n t o f t h e consumer f o r which a s a t i s f a c t i o n i s sought. The more s e l e c t i v e t h i s r e q u i r e m e n t (and t h e more i m p o r t a n t t h e o b j e c t o r o b j e c t s sought a f t e r a r e t o t h e consumer) the g r e a t e r the p r o b a b i l i t y o f i n c u r r i n g more t r a v e l t i m e , and c o n s e q u e n t l y g r e a t e r c o s t s , i n seeking s a t i s f a c t i o n . * 9  W i l l i a m J . fieilly, The Law o f R e t a i l G r a v i t a t i o n , 1 s t ed., New Y o r k , W i l l i a m J . R e i l l y Company, 1931, p. 36. 19 J . E. Brush and E. L . G a u t h i e r , S e r v i c e Centres and Consumer T r i p s , Department o f Geography Research P a p e r 113, U n i v e r s i t y o f Chicago P r e s s , 1967, p. 167.  62 D.  Distance v s . P r i c e of Merchandise Consumers tend t o t r a v e l f a r t h e r t o buy h i g h e r p r i c e d  goods t h a n t h e y would t o buy l o w e r p r i c e d goods.  Such h i g h e r  p r i c e d goods, p a r t l y because they consume a p r o p o r t i o n a t e l y l a r g e r share o f t h e consumer's d i s p o s a b l e income, are o f g r e a t e r s i g n i f i c a n c e t o the consumer who  i s t h e r e f o r e more w i l l i n g t o  shop around and expend a g r e a t e r e f f o r t and t r a v e l f a r t h e r i n t h e attempt t o ensure t h a t he g e t s " h i s money's w o r t h . " E.  D i s t a n c e v s . C l a s s o f Goods On t h e o t h e r hand, consumers a r e n o t w i l l i n g t o t r a v e l  so f a r o r expend as much time and e f f o r t i n t h e p u r s u i t of goods such as convenience i t e m s which a r e o f l e s s e r monetary and  social  s i g n i f i c a n c e t o them.  over  Consumer shopping s u r v e y s conducted  many y e a r s have shown t h a t f o r convenience goods, g e o g r a p h i c a l convenience i s c o n s i d e r e d by consumers t o be the most i m p o r t a n t f a c t o r i n t h e i r c h o i c e of s t o r e s i n which t o shop.  The consumer  u s u a l l y chooses o u t l e t s from among those most c o n v e n i e n t l y s i t u a t e d n e a r the home. merchandise  Only t h e r e a f t e r do t h e f a c t o r s of  and v a l u e and s e r v i c e come i n t o p l a y .  T h e r e f o r e , the  t r a d e a r e a boundary f o r convenience goods i s c o n s i d e r a b l y n e a r e r t o the c e n t r e t h a n i s the boundary f o r h i g h e r o r d e r goods, o r i n o t h e r words, the a r e a of e f f e c t i v e a t t r a c t i o n does n o t extend as f a r from the c e n t r e f o r convenience goods as f o r h i g h e r o r d e r goods.  N e l s o n , op. c i t . , p.  212.  63 P.  Distance v s . Breadth  of S e l e c t i o n  I n a d d i t i o n t o t h e c l a s s o f goods, a n o t h e r f a c t o r a f f e c t i n g t h e consumer's p e r c e p t i o n o f t r a v e l c o s t s i s t h e breadth  of s e l e c t i o n i n merchandise.  Presumably, t h e g r e a t e r  the number o f s e l e c t i o n s o f f e r e d a t a r e t a i l  f a c i l i t y , the  g r e a t e r i s t h e consumer's e x p e c t a t i o n t h a t h i s shopping t r i p w i l l be s u c c e s s f u l a t t h a t f a c i l i t y . l o g i c a l t h a t consumers w i l l  C o n s e q u e n t l y i t appears  show a w i l l i n g n e s s t o t r a v e l  d i s t a n c e s f o r any good o r s e r v i c e as t h e b r e a d t h creases.  greater  of selection i n -  T h i s would appear t o be e s p e c i a l l y t r u e i n t h e case  where t h e consumer w i s h e s t o "shop around" f o r an i n f r e q u e n t l y p u r c h a s e d , more s i g n i f i c a n t i t e m .  Broader s e l e c t i o n provides  more o p p o r t u n i t y t o "shop around" f o r t h e " r i g h t " c h o i c e i n s t y l e , q u a l i t y , or p r i c e . There a r e a number o f o t h e r f a c t o r s which m o d i f y t h e consumer's a t t i t u d e toward d i s t a n c e and the most i m p o r t a n t o f these w i l l be d i s c u s s e d below under t h e i r r e s p e c t i v e h e a d i n g s . A c c e s s i b i l i t y , T r a f f i c , and T r a n s p o r t a t i o n One o f t h e c h i e f r e a s o n s f o r choosing  a particular  i s t o secure t h e maximum a c c e s s i b i l i t y and t h e r e b y  t o have 21  a v a i l a b l e as much o f t h e b u s i n e s s p o t e n t i a l as p o s s i b l e . s t o r e o r c e n t r e must be a c c e s s i b l e t o l a r g e a r e a s and l a r g e p o p u l a t i o n d i s t r i b u t i o n s i f I t i s t o secure a l a r g e r r e t a i l volume.  I b i d . , p. 51.  site  The  64 A l t e r n a t i v e s i t e s must "be a n a l y z e d  i n terms of  the  major a c c e s s r o a d s i n the a r e a , I n o r d e r t o a s c e r t a i n whether t h e s e a c c e s s roads have s u f f i c i e n t c a p a c i t y and  are  l o c a t e d t o tap the p o t e n t i a l market i n the a r e a , and  properly whether  t h e y are o f s u f f i c i e n t c a p a c i t y to p e r m i t the h i g h e r t r a f f i c  use  t h a t w i l l be demanded o f them when the c e n t r e i s completed.  It  i s a l s o n e c e s s a r y t o make sure the consumers w i l l be a b l e t o e a s i l y e n t e r t h e s e a c c e s s r o u t e s i n o r d e r t h a t i t w i l l be  easier  f o r a g r e a t e r number of consumers i n the t r a d i n g a r e a t o shop a t the  centre. A s i t e t h a t has good a c c e s s i b i l i t y i s one t h a t can  e a s i l y reached by customers, which i m p l i e s s h o r t d i s t a n c e s 22 ease i n d r i v i n g .  be and  I t i s a r e l a t i v e term, o f t e n used i n a com-  p a r a t i v e sense t o d e s c r i b e a s i t e t h a t i s more e a s i l y reached than another. T r a f f i c congestion  can reduce the s a l e s t h a t a  centre  g e t s from more d i s t a n t p a r t s of i t s t r a d e a r e a , a r e s u l t of  the  f a c t t h a t consumers are f o r c e d t o expend a g r e a t e r amount of time and  effort to battle  t h e i r way  through t h i s t r a f f i c  t h e d i s t a n c e i n c r e a s e s from t h e c e n t r e .  congestion  Greater t r a f f i c  t i o n i n c r e a s e s the time r e q u i r e d t o r e a c h the c e n t r e , and r e s i s t a n c e t o p a t r o n i z i n g a c e n t r e i n c r e a s e s as the time effort required increases.  If traffic  congesconsumer and  f r i c t i o n i s h i g h , drawing  power w i l l be more i n t e n s i v e , or i n o t h e r words, the c e n t r e draw from a s m a l l e r  area.  S a u l B. Cohen and ¥. Applebaum, "Major C o n s i d e r a t i o n s E v a l u a t i n g a S t o r e S i t e , " i n K o r n b l a u , op. c l t . , p. 8 3 . 2 3  I b i d . , p.  85.  as  in  will  65  Road s u r f a c e c o n d i t i o n s a l s o a f f e c t a c c e s s i b i l i t y . S i t e approaches t h a t a r e unpaved, p o t - h o l e d , give poor a c c e s s i b i l i t y .  S i m i l a r problems i n a c c e s s i b i l i t y  a r i s e i f a c c e s s must be o b t a i n e d without  narrow o r steep  the a i d o f a t r a f f i c  by t u r n i n g l e f t o f f a highway  light.  Such problems i n a c c e s s i b i l i t y a r e b a s i c a l l y r e l a t e d t o the road networks n e a r t o , and s e r v i n g , t h e c e n t r e .  Poor access  can s e v e r e l y r e s t r i c t t h e a c t u a l p a t r o n a g e , e s p e c i a l l y i f comp e t i n g f a c i l i t i e s have e a s i e r a c c e s s .  I n t h i s c a s e , expected  p r o j e c t e d s a l e s volumes may n e v e r m a t e r i a l i z e i f they have been d e r i v e d w i t h no adjustment f o r t h e poor a c c e s s .  I f the access  i s p o o r enough t h a t i t t a k e s 3 o r 4 minutes l o n g e r i n d r i v i n g time t o r e a c h t h e s i t e as compared t o a n o t h e r , l o s s o f patronage may w e l l be t h e r e s u l t .  The e f f e c t of poor a c c e s s i b i l i t y i s t h a t  i t i n c r e a s e s the "nuisance"  c o s t t o t h e customer, o r i n c r e a s e s  the e f f o r t he must make t o v i s i t a p a r t i c u l a r s i t e .  I f he i s  shopping f o r convenience goods, where t h e e f f o r t t h r e s h o l d i s l o w , he may n o t make t h e e f f o r t , and may i n s t e a d v i s i t a competing location.  The e f f e c t i s n o t so pronounced w i t h  o r d e r goods, f o r t h e customer w i l l n o r m a l l y  expend a g r e a t e r  e f f o r t f o r t h e s e non-convenience goods anyway. is s t i l l likely The  higher-  However, t h e e f f e c t  t o be n o t i c e a b l e , o n l y J u s t t o a l e s s e r e x t e n t .  s i g n i f i c a n c e of small t i m e - d i f f e r e n c e s i s , of course, 24  r e l a t e d to the s i z e of the trade area of the centre, a r e a f o r each type o f p r o d u c t ,  the trade  and t h e d i s t r i b u t i o n o f p o p u l a t i o n .  I n t h e case o f convenience goods, which enjoy a s m a l l e r t r a d e  area  66 t h a n h i g h e r - o r d e r goods, a few minutes i n d r i v i n g time may i n c l u d e a s i g n i f i c a n t p a r t o f t h e t r a d e a r e a and c o u l d have s e r i o u s consequences.  I n t h e case o f h i g h e r o r d e r goods, a few  m i n u t e s d r i v i n g time would have l e s s s i g n i f i c a n c e hut s t i l l  some  effect. T r a f f i c flow patterns affect r e t a i l outlets i n that t h e s e f l o w p a t t e r n s can c r e a t e c o n s i d e r a b l e f r i c t i o n hamper a s i t e ' s a c c e s s i b i l i t y . i s h e a v i l y congested  and t h e r e b y  B e i n g l o c a t e d on an a r t e r y t h a t  i s n o t m e r e l y a problem i n p h y s i c a l conges-  t i o n ; i t i s p s y c h o l o g i c a l as w e l l .  Automobile  shoppers do n o t  enjoy t h e p r o s p e c t o f d r i v i n g a l o n g a r o u t e w h i c h i s jammed w i t h through off  traffic.  L o c a t i n g so t h a t a c c e s s can be a c h i e v e d  e f f i c i e n t , uncongested a r t e r i e s , can s i g n i f i c a n t l y  easily  enlarge  the c e n t r e ' s t r a d e a r e a , s i n c e t h e time e x p e n d i t u r e r e q u i r e d t o r e a c h t h e c e n t r e i s l e s s from g r e a t e r d i s t a n c e s . D r i v i n g time depends p r i m a r i l y on t h e e x i s t i n g road n e t work, and i s a f f e c t e d by road c a p a c i t y .  Major r e g i o n a l centres  a r e l a r g e t r a f f i c g e n e r a t o r s , which c o u l d g i v e r i s e t o acute difficulties  i f heavy c o n c e n t r a t i o n s o c c u r r e d on roads o f i n -  adequate c a p a c i t y . The c r e a t i o n o f h i g h speed l i m i t e d a c c e s s by-pass h i g h ways around t h e c i t y ,  c a r r y i n g through t r a f f i c , h a s e s t a b l i s h e d  a new c r i t e r i o n o f a c c e s s i b i l i t y .  T y p i c a l l y , these h i g h speed  by-passes a r e i n t e r s e c t e d , perhaps w i t h g r e a t s e p a r a t i o n s , by many o f t h e major s t r e e t s i n t h e community. by-pass,  A c c e s s i b i l i t y to the  t h e n , or t o a p l a c e where m o t o r i s t s can g e t o f f t h e by-  p a s s (an I n t e r c h a n g e ) would be n e c e s s a r y i f t h e customers were t o have easy a c c e s s t o t h e shopping  centre.  Furthermore,  l a r g e c e n t r e s produce tremendous t r a f f i c p r o b l e m s , good  since  67 a c c e s s i b i l i t y from a s e r i e s o f r a d i a l highways o r s t r e e t s o r m a j o r a r t e r i e s w i t h a minimum o f c o n g e s t i o n becomes a most 25 desirable locational c r i t e r i o n . Of course i t i s n e c e s s a r y t o know t h e e x a c t l o c a t i o n o f 26 new highways o r freeways and what a r e a s t h e y w i l l f e e d . l o c a t i o n analyst  The  should a s c e r t a i n the exact l o c a t i o n of access  p o i n t s , o u t l e t s , and i n t e r c h a n g e s , t h e e x a c t l o c a t i o n o f o v e r p a s s e s and u n d e r p a s s e s ,  and t h e e x a c t l o c a t i o n o f f r o n t a g e r o a d s .  T h i s i s n e c e s s a r y i f he i s t o know i f a new highway w i l l i n e f f e c t become a b a r r i e r between t h e s i t e and a p o r t i o n o f t h e e x i s t i n g trading area. what t h e p r e l i m i n a r y  Anyone s e l e c t i n g a r e t a i l  s i t e must know  d e t a i l e d p l a n s a r e f o r such new roads so  t h a t t h e s e can be t a k e n i n t o  account.  The r e l a t i o n s h i p of t h e new highway t o t h e p o t e n t i a l t r a d i n g a r e a i s what must be weighed.  I f t h e road c u t s through  a p o p u l a t e d a r e a and has a c c e s s ramps t h r o u g h o u t , i t may c r e a t e 27 good a c c e s s i b i l i t y .  But i f t h e highway i t s e l f r e p r e s e n t s t h e  o u t e r boundary o f t h e t r a d i n g a r e a t h e l o c a t i o n becomes u n d e s i r a b l e . I f o n l y 10% o f t h e t r a f f i c  on t h e highway i s o f a l o c a l t r a d i n g  a r e a n a t u r e , and the b a l a n c e i s composed o f p e o p l e i n t h e m i d d l e o f a t r i p , i t i s u n l i k e l y t h a t t h o s e p e o p l e w i l l shop a t t h e 28 centre.  I n t h i s case, a h i g h t r a f f i c  n o t h i n g when e s t i m a t i n g volume s a l e s ^ N e l s o n , op. c i t . , p. 180, 2  Kane, op. c l t . 2 7  2 8  md., Ibid.  p. 63.  t  p. 66.  count means v i r t u a l l y  projections.  68 S t r e e t and highway c o n s t r u c t i o n must always be weighed by a s k i n g o n e s e l f what the changes w i l l do to the whole p a t t e r n o f movement w i t h i n an a r e a : be s t r e n g t h e n e d  W i l l e s t a b l i s h e d shopping  o r weakened by the new  r o a d s ; w i l l new  districts focal  p o i n t s be c r e a t e d t h a t w i l l a t t r a c t major r e t a i l i n g f a c i l i t i e s ; w i l l the new  road open up the t r a d i n g a r e a , o r w i l l i t s l i c e i t  i n h a l f ; w i l l l o c a l o r through t r a f f i c use i t ; what c o m p e t i t o r s are l i k e l y  t o be a t t r a c t e d by t h i s development; e x a c t l y when w i l l  the road be completed,  and how  does t h i s r e l a t e t o the t i m i n g of  planning. The t r a f f i c a r t e r y p a t t e r n s and t r a f f i c l i g h t l o c a t i o n s can s e v e r e l y a l t e r t h e t r a d e a r e a o f a c e n t r e , i n t h a t customers from d i f f e r e n t d i r e c t i o n s w i l l f i n d the e x i s t i n g road and  traffic  l i g h t networks more or l e s s time consuming and t h e r e f o r e more or l e s s convenient.  B e i n g l o c a t e d on the wrong s i d e o f the highway  can cause shoppers t o p a t r o n i z e a competing f a c i l i t y which i s f a r t h e r away but e a s i e r and l e s s time consuming t o r e a c h . example, shoppers from t h e e a s t o f a c e n t r e may  be a b l e t o d r i v e  d i r e c t l y t o a c e n t r e l o c a t e d on the n o r t h s i d e o f an  east-west  freeway, w i t h o u t h a v i n g t o t u r n l e f t o r w a i t f o r t r a f f i c Those shoppers t o the south o f the c e n t r e may  For  lights.  have t o e n t e r and  e x i t from s e v e r a l t r a f f i c a r t e r i e s , w a i t f o r s e v e r a l t r a f f i c l i g h t s , and make a l e f t t u r n o f f a busy highway i n t e r c h a n g e onto a congested live  feeder road.  So f o r these shoppers,  even though they  c l o s e r to t h i s c e n t r e than the shoppers l i v i n g  t h e time r e q u i r e d t o r e a c h the c e n t r e may and they may  to the e a s t ,  be c o n s i d e r a b l y g r e a t e r ,  e l e c t to choose a competing c e n t r e which may  be  f a r t h e r away i n d i s t a n c e , but more c o n v e n i e n t and l e s s time suming t o r e a e h .  I n t h i s c a s e , t h e shopping  con-  centre trade area  69 w i l l n o t extend as f a r s o u t h as i t does e a s t . I n a s s e s s i n g t h e road p a t t e r n s w i t h i n t h e t r a d e 29  area,  the f o l l o w i n g should be c o n s i d e r e d : 1.  T r a f f i c a r t e r i e s - t h e number o f l a n e s , w i d t h , and d i r e c t i o n of major r o u t e s ;  2.  I n t e r s e c t i o n s - t h e l o c a t i o n and c a p a c i t y of major i n t e r s e c t i o n s i n t h e t r a d e e s p e c i a l l y those  area,  close t o , or serving the  site; 3.  T r a f f i c flows - t r a f f i c rates at various times o f t h e day and days o f t h e week;  4.  M o b i l i t y f a c t o r s - speed l i m i t s , lights, hills, due  5.  traffic  stop s i g n s , road s u r f a c e c o n d i t i o n s , sharp c o r n e r s , c o n g e s t i o n ,  choking  to on-street parking;  A c c e s s i b i l i t y o f main a r t e r i e s - i n c l u d i n g c a p a c i t i e s o f f r e e w a y s and t h e ease o f entrance  6.  and e x i t from such f r e e w a y s ;  Proposed new  roads.  P r i v a t e and p u b l i c t r a n s p o r t a t i o n c a p a b i l i t i e s o f the a r e a should be c o n s i d e r e d . consider:  P r i v a t e t r a n s p o r t s t u d i e s should  t h e number o f a u t o m o b i l e s p e r f a m i l y i n t h e a r e a ;  t r a v e l times from v a r i o u s p a r t s o f t h e a r e a t o the s i t e ;  adequacy  of proposed p a r k i n g f a c i l i t i e s ; and g e n e r a l t r a f f i c c o n d i t i o n s and  a c c e s s i b i l i t y t o the s i t e .  The study o f p u b l i c t r a n s p o r t a t i o n  s e r v i c e s would i n c l u d e t h e c o s t , t r a v e l times from v a r i o u s p a r t s 29  J o n e s , op. c i t . , p. 51.  70 o f the a r e a , r o u t e coverage o f the a r e a , f r e q u e n c y o f and the p o t e n t i a l s e r v i c e i f the new  schedules, 30  c e n t r e were b u i l t .  A n o t h e r c o n s i d e r a t i o n i s the manner i n which  accessibility  i s a f f e c t e d by the amount of t r a f f i c f l o w i n t o the shopping itself.  I f t h e r e i s c u s t o m a r i l y a l o n g l i n e o f shopping  t r a f f i c t a k i n g a l e f t t u r n t o e n t e r the s i t e ( c u t t i n g  centre  centre  across  t r a f f i c i n the p r o c e s s ) t h i s makes i t more d i f f i c u l t f o r d r i v e r s t o e n t e r the s i t e even i f a t r a f f i c l i g h t i s p r o v i d e d to stop  on-  coming t r a f f i c . I n p l a n n i n g the p a r k i n g f o r a shopping  c e n t r e , i t may  be advantageous t o e l i m i n a t e a few p a r k i n g spaces i n o r d e r t o i n c r e a s e the a c c e s s i b i l i t y t o the r e m a i n i n g p a r k i n g spaces.  In  t h i s case p a r k i n g and a c c e s s i b i l i t y are r e a l l y one i n the same problem i n t h a t t h e y are both concerned f o r the consumer. shopping  w i t h maximizing  convenience  Money expended i n i m p r o v i n g access t o the  c e n t r e through  c o n s t r u c t i o n of s t o r a g e l a n e s and the l i k e  i s as w e l l spent as i t i s on p a r k i n g s t a l l s .  The shopper can't  park u n t i l he can g e t i n t o the l o t , and he w i l l not come a g a i n i f he has t r o u b l e g e t t i n g o u t . D i f f e r e n t Trade A r e a s f o r D i f f e r e n t Goods P r e v i o u s s t u d i e s have shown t h a t s t o r e s l o c a t e d i n the same shopping  c e n t r e but s e l l i n g d i f f e r e n t goods and s e r v i c e s  draw t h e i r b u s i n e s s from the same g e n e r a l t r a d e a r e a - but t h a t the drawing power and market p e n e t r a t i o n i s not n e c e s s a r i l y the 31 same f o r each s t o r e . 30 I b i d . , p. 31  52.  Prank J . S p a r a c i o , Trade A r e a V a r i a t i o n s f o r D i f f e r e n t S t o r e Departments," i n K o r n b l a u , op. c l t . , p. 229.  71 A.  Convenience Goods Convenience goods a r e u s u a l l y o f s m a l l u n i t v a l u e , a r e  purchased f r e q u e n t l y , a r e o f t e n purchased on i m p u l s e , and a r e t h o s e which t h e consumer u s u a l l y d e s i r e s t o purchase w i t h a minimum of t i m e and e f f o r t a t t h e most c o n v e n i e n t and a c c e s s i b l e store.  They a r e those goods t h a t consumers w i l l n o t go out o f  t h e i r way t o o b t a i n . B.  Shopping Goods Shopping goods a r e t y p i c a l l y h i g h e r i n p r i c e than con-  v e n i e n c e goods, and p r i c e and q u a l i t y a r e o f g r e a t e r i m p o r t a n c e to  t h e consumer.  They a r e purchased l e s s f r e q u e n t l y and t h e  b u y i n g d e c i s i o n u s u a l l y t a k e s l o n g e r t o make.  Some o f t h e s e  i t e m s r e q u i r e major purchase d e c i s i o n s and I n v o l v e major income expenditure.  F o r t h i s r e a s o n , p r i c e and q u a l i t y c o n s i d e r a t i o n s  are  i m p o r t a n t and c o n s e q u e n t l y much shopping i s done t o o b t a i n  the  best value p o s s i b l e .  S t y l e goods a r e a form o f shopping  goods and i n many cases c a r r y c o n n o t a t i o n s o f s t a t u s t o t h e consumer, t h e r e s u l t b e i n g t h a t a p a r t i c u l a r consumer i s w i l l i n g t o spend more t i m e , e f f o r t , t r a v e l f a r t h e r d i s t a n c e s , and spend more money i n o r d e r t o o b t a i n goods which a r e more i m p o r t a n t t o him. I f t h e assumption t h a t t h e f r e q u e n c y of p u r c h a s e i s r e l a t e d t o the t y p e o f goods sought i s v a l i d , we would e x p e c t t h a t , i n g e n e r a l , customers r e s i d i n g c l o s e t o a c e n t r e w i l l  buy  f o o d on each v i s i t t o t h e c e n t r e ; t h a t customers a r e w i l l i n g t o t r a v e l f a r t h e r t o o b t a i n g e n e r a l merchandise which i s n o t r e a d i l y a v a i l a b l e t o t h e i r s a t i s f a c t i o n n e a r e r t h e i r home; and t h a t the customers more d i s t a n t from the s t o r e may buy t h e i r f o o d elsewhere  72 and come t o the c e n t r e o n l y t o purchase g e n e r a l m e r c h a n d i s e .  32  I t f o l l o w s t h a t the g e n e r a l merchandise s t o r e s w i l l have a l a r g e r p r o p o r t i o n o f customers r e s i d i n g f a r t h e r away from the s t o r e and t h a t the g e n e r a l merchandise p r i m a r y t r a d e a r e a w i l l , t h e r e f o r e , he l a r g e r . The a c t u a l p h y s i c a l a r e a o f the g e n e r a l merchandise p r i m a r y t r a d e a r e a becomes p r o p o r t i o n a t e l y l a r g e r than t h a t of the convenience goods o u t l e t s as the d e n s i t y o f p o p u l a t i o n de33 clines.  One main reason l i e s i n the f a c t t h a t even though  s t r a i g h t l i n e d i s t a n c e p r o p o r t i o n s may r a d i u s o f the c i r c l e  be the same, the i n c r e a s i n g  encompasses a broader a r e a .  i s a f f e c t e d by c o m p e t i t i v e c o n d i t i o n s w i t h i n the  Drawing power surrounding  p r i m a r y a r e a , d i f f e r e n c e s i n highway p a t t e r n s , d e n s i t y o f t r a f f i c f r i c t i o n , d e n s i t y of p o p u l a t i o n , and a c c e s s i b i l i t y .  A l l other  t h i n g s b e i n g e q u a l , i t i s p r o b a b l y t r u e t h a t the s i z e o f the convenience goods t r a d e a r e a remains i n p r o p o r t i o n t o the goods t r a d i n g a r e a .  shopping  However, i n a r e a s o f l o w e r d e n s i t y , the  d r a w i n g power f o r each type o f goods extends over a broader T h i s i s m a i n l y because of t i m e - d i s t a n c e f a c t o r s .  I n o t h e r words,  i n a r e a s o f l o w e r p o p u l a t i o n d e n s i t y , g r e a t e r d i s t a n c e s can t r a v e l l e d without a greater expenditure  area.  be  of time and e f f o r t owing  to a l e s s e r degree o f t r a f f i c c o n g e s t i o n .  Generally  speaking,  we would expect some s o r t o f r a t i o t o a p p l y between t i m e - d i s t a n c e for  the convenience goods items as compared t o t i m e - d i s t a n c e f o r  shopping  goods i t e m s .  I b i d . , p.  F o r example, shopping  230.  I b i d . , pp. 230 - 31.  goods customers  73 might spend t w i c e as much time t r a v e l l i n g t o a f a c i l i t y as would convenience goods shoppers, and the p o p u l a t i o n d e n s i t y .  t h i s would a p p l y r e g a r d l e s s  However, t h i s i s a l t e r e d by the  f a c t o r s o u t l i n e d p r e v i o u s l y ; namely, c o m p e t i t i v e or surrounding patterns  conditions within  though, we may  the i n t e n s i t y of t r a f f i c  0.  friction.  conclude t h a t drawing power i s a f f e c t e d  b o t h by d i f f e r e n c e s i n the type of merchandise and lation  various  the p r i m a r y t r a d e a r e a , d i f f e r e n c e s i n highway  ( a c c e s s i b i l i t y ) , and  In general  of  a l s o by popu-  density.  S p e c i a l t y Goods The  consumer's w i l l i n g n e s s t o t r a v e l t o a c e r t a i n o u t l e t  o f f e r i n g a s p e c i f i c item f o r purchase i s a f f e c t e d by h i s w i l l i n g n e s s t o s u b s t i t u t e o t h e r i t e m s o f f e r e d a t o t h e r l o c a t i o n s more c o n v e n i e n t t o the consumer.  S p e c i a l t y goods are not as prone to  s u b s t i t u t i o n as convenience goods.  Consumers l o o k i n g f o r s p e c i a l t y  goods are l o o k i n g f o r something s p e c i a l .  Therefore,  they  are  more w i l l i n g t o shop around f o r them i n o r d e r t o f i n d " J u s t right thing."  I s a r e s u l t t h e y are n o r m a l l y  more e f f o r t i n s e a r c h i n g  f o r these goods, and  the  w i l l i n g t o expend are w i l l i n g  to  t r a v e l g r e a t e r d i s t a n c e s , e s p e c i a l l y i f i n d o i n g so they b e l i e v e t h e r e i s a g r e a t e r l i k e l i h o o d o f f i n d i n g the r i g h t a r t i c l e .  The  l a r g e r the u n i t of purchase o r the amount o f money i n v o l v e d ,  the  g r e a t e r the element of s t y l e i n h e r e n t i n the m e r c h a n d i s e , and  the  more t h a t Item i s s i g n i f i c a n t to the consumer, the f a r t h e r the consumer w i l l t r a v e l t o buy  it.  I t f o l l o w s t h a t the e f f e c t i v e  t r a d i n g a r e a f o r s p e c i a l t y goods i s l a r g e r t h a n t h a t f o r conv e n i e n c e goods w h i c h are not so i m p o r t a n t t o the consumer and  for  which the consumer i s more l i k e l y to accept a s u b s t i t u t e r a t h e r  74  t h a n expend g r e a t e r e f f o r t s e a r c h i n g f o r something which i s not r e a l l y of g r e a t importance t o  him.  F u r t h e r m o r e , the l e s s f r e q u e n t l y a p a r t i c u l a r commodity i s p u r c h a s e d , the more p e o p l e t h e r e must be i n the t r a d e to  support  an o u t l e t s e l l i n g o n l y t h i s commodity.  area  Because the  commodity i s s o l d l e s s f r e q u e n t l y , and because more p e o p l e are needed to support  a facility  s e l l i n g o n l y t h i s commodity, and  because t h e r e are fewer s t o r e s per c a p i t a t h a t s e l l t h i s commodity, p e o p l e w a n t i n g t o buy i t must t r a v e l f u r t h e r t o get i t . Demographic F a c t o r s The  a n a l y s t and the d e v e l o p e r  should know whether they  are d e a l i n g w i t h the f a m i l i e s of f a c t o r y workers or w i t h those  of  e x e c u t i v e s , w i t h young, l a r g e f a m i l i e s or w i t h o l d e r , s m a l l e r ones.  Therefore  we are d e a l i n g w i t h (1) income l e v e l ,  (2) occupa-  34  t i o n a l type, (3)  age l e v e l s , and  i s e t h n i c background.  (4)  family size.  Also  important  F o r example, i f c e r t a i n s e c t i o n s of the  t r a d e a r e a are p o p u l a t e d  w i t h p e o p l e of European d e s c e n t , c e r t a i n  p a r t i c u l a r tastes i n clothing apparel, f u r n i t u r e , groceries etc. may  be p r e v a l e n t .  The p r e s e n c e of such groups must be r e l a t e d t o  m e r c h a n d i s i n g p l a n s and t e n a n t t y p e s i n the new A.  centre.  Income Groups The l o w e r income p o p u l a t i o n w i l l  spend a r e l a t i v e l y  l a r g e r p r o p o r t i o n of t h e i r d i s p o s a b l e Income f o r food than the h i g h e r income g r o u p s , and on the o t h e r hand, the h i g h income group will  spend more f o r l u x u r i e s p r o p o r t i o n a t e t o t h e i r  Kane, op. c l t . , p.  55.  purchasing  75  power.  C e n t r e s s e r v i n g h i g h e r income groups o f t e n tend to b e n e f i t  from h i g h e r p e r c a p i t a s a l e s as a r e s u l t o f the h i g h e r d i s p o s a b l e income p e r c a p i t a .  A n a l y s t s s e e k i n g t o e s t i m a t e a s a l e s volume  p o t e n t i a l f o r a new  c e n t r e must be aware o f the income l e v e l s  p r e v a l e n t i n the t r a d e a r e a .  They must a l s o a d v i s e the  developer  of predominant income groups i n the a r e a so t h a t merchandise and t e n a n t mix can be planned  t o maximum advantage.  H i g h e r income  groups are n o r m a l l y i n a b e t t e r p o s i t i o n t o a f f o r d h i g h e r p r i c e d , h i g h e r q u a l i t y merchandise, and i n f a c t o f t e n p r e f e r to p a t r o n i z e a c e n t r e o f f e r i n g t h i s merchandise even i f i t happens t o be more d i s t a n t from them than another c e n t r e whose m e r c h a n d i s i n g i s d i r e c t e d toward l o w e r income  policy  groups.  Upper income f a m i l i e s are o f t e n i n a b e t t e r p o s i t i o n t o t r a v e l f a r t h e r and more o f t e n t o shop than l o w e r income f a m i l i e s owing i n p a r t to t h e i r h i g h e r d i s p o s a b l e income and the h i g h e r i n c i d e n c e of two c a r s i n t h i s group.  T h i s group i s n o r m a l l y more  i n t e r e s t e d i n the h i g h e r p r i c e d i t e m s and w i l l t r a v e l f a r t h e r t o ensure s a t i s f a c t o r y s e l e c t i o n i n p r i c e and q u a l i t y .  Hence, a  c e n t r e i n which can be found h i g h e r p r i c e d goods t h a t appeal t o the upper income f a m i l i e s may  expect t o a t t r a c t patronage from  g r e a t e r d i s t a n c e s than a c e n t r e whose s t o r e s c a r r y l o w e r p r i c e d goods.  I f , however, the t r a d e a r e a i s p r e d o m i n a n t l y  l o w e r income groups, then m e r c h a n d i s i n g to  composed o f  p o l i c i e s must be a p p r o p r i a t e  t h i s group o r the c e n t r e w i l l not a t t r a c t the p o t e n t i a l p a t r o n -  age i t c o u l d i f the merchandise mix were b e t t e r matched to the c h a r a c t e r o f the t r a d e a r e a . The  suburban shopping  c e n t r e s e r v e s a market q u i t e  d i f f e r e n t from t h a t o f the downtown r e t a i l c o r e .  To a g r e a t e r  degree, the suburban c e n t r e market i s composed o f younger p e o p l e ,  76  younger f a m i l i e s , and l a r g e r f a m i l i e s .  The merchandise r e -  quirements f o r t h i s market v a r y a c c o r d i n g l y :  smaller sizes i n  c l o t h i n g , c h i l d r e n ' s wear, and h o u s e h o l d f u r n i s h i n g s a r e more i n demand.  The p r e v a l e n c e of young consumers r e q u i r e s t h a t a com-  p l e t e l y d i f f e r e n t m e r c h a n d i s i n g approach he f o l l o w e d as compared to  older people.  W i t h young growing f a m i l i e s , home f u r n i s h i n g s  needs a r e h i g h e r and t h e i r p u r c h a s e s o f h i g h e r o r d e r goods a r e higher. to  C o n s e q u e n t l y , the shopping c e n t r e which i s p r o p o s i n g  s e r v e t h i s market must n e c e s s a r i l y t a i l o r i t s t e n a n t and mer-  c h a n d i s e mix t o s u i t t h i s market, o r i t s a n t i c i p a t e d  attractive  power and c o r r e s p o n d i n g s a l e s volume p o t e n t i a l may n o t m a t e r i a l i z e . Income c l a s s , governed by the o c c u p a t i o n o f the head of the  household, i s responsible f o r considerable v a r i a t i o n s In  expenditure.  I n the l o w e s t income group, r e t a i l e x p e n d i t u r e  a c c o u n t s f o r a c o n s i d e r a b l e amount o f the f a m i l y income, t h e p r o p o r t i o n o f t h i s amount d e c r e a s i n g w i t h the c o r r e s p o n d i n g r i s e 35  i n incomes and depending on t h e t y p e of t r a d e . The v i a b i l i t y  o f a major r e g i o n a l c e n t r e I s h e a v i l y  dependent on s a l e s o f d u r a b l e goods, i n a d d i t i o n t o s a l e s by convenience o u t l e t s , such as s u p e r m a r k e t s .  Consequently, a great  r e l i a n c e i s p l a c e d on p u r c h a s e s of d u r a b l e goods by the h i g h e r income groups, which have a g r e a t e r p e r c e n t a g e o f c a r owners and 36  more f l e x i b i l i t y i n shopping h a b i t s . t h e s e f a c t o r s i s emphasized  The s p e c i a l importance o f  i n r e g i o n a l shopping c e n t r e s where  p o t e n t i a l t r a d e from v e r y low income groups i s o f t e n d i s r e g a r d e d J o n e s , op. c l t . , p. 3 6  Ibid.  45.  77  i n t h e economic a n a l y s i s , even i f t h i s amounts t o over 50% 37 of t h e t r a d e a r e a . B.  Incomes, S o c i a l C l a s s , and Age Groups B u c k l i n has produced some i n t e r e s t i n g f i n d i n g s r e g a r d i n g  t h e r o l e t h a t demographic f a c t o r s p l a y i n consumer p a t r o n a g e behaviour.  He f o u n d , among o t h e r t h i n g s , t h a t : 1.  Consumers from neighbourhoods w i t h above average Incomes and s o c i a l s t a t u s showed a much h i g h e r p r o p e n s i t y t o shop i n t h e downtown c o r e t h a n i n secondary suburban centres.  2.  Consumers from below average neighbourhoods and l o w e r s o c i a l s t a t u s were more i n c l i n e d t o shop i n t h e suburban c e n t r e s ; and t h i s propensity diminished with r i s i n g s t a t u s and income  3.  social  levels.  Consumers were more l i k e l y t o shop i n suburban c e n t r e s when shopping i n t h e e v e n i n g , b u t tended t o p r e f e r t h e downtown c o r e f o r daytime shopping t r i p s .  4.  Shoppers w i t h c h i l d r e n tended t o p r e f e r suburban c e n t r e s , and a l s o p r e f e r r e d onestop shopping a t t h e suburban l o c a t i o n .  5.  The more shopping s t o p s a consumer was w i l l i n g t o make, t h e more l i k e l y  •57  that  G. Baker and B. F u n a r o , Shopping C e n t r e s : D e s i g n and O p e r a t i o n , R e i n h o l d P u b l i s h i n g Corp., New YorkV 1951, p. 19b.  78  consumer would p a t r o n i z e  the down-  town c o r e . 6.  On p r i c e c o n s i d e r a t i o n s  a l o n e , shoppers  were more l i k e l y to shop downtown l o c a t i o n s i n a n t i c i p a t i o n of b e t t e r  price  satisfaction. 7.  Suburban c e n t r e s outranked the downtown core on  8.  convenience.  Advertising  by downtown merchants had  a  much g r e a t e r e f f e c t on a consumer's shopp i n g d e s t i n a t i o n t h a n d i d suburban c e n t r e advertising. 9.  Consumers were f a r more l i k e l y to shop 38  downtown f o r The estimating  apparel.  above f a c t o r s must be t a k e n i n t o account when  the p r o b a b i l i t y o f consumer p a t r o n a g e , because such  f a c t o r s a f f e c t d i f f e r e n t consumers d i f f e r e n t l y i n t h e i r p e r c e p t i o n of the a t t r a c t i o n of a p a r t i c u l a r o u t l e t and ness to s u s t a i n t r a v e l c o s t s to v i s i t t h a t o u t l e t .  in their willing For  example,  the e x i s t e n c e of h i g h p r i c e d l i n e s o f merchandise a t a p a r t i c u l a r c e n t r e may  h e i g h t e n the a t t r a c t i o n of t h a t c e n t r e as f a r as h i g h  income groups are  concerned who  t r a v e l to that centre. merchandise may c e n t r e f o r low  would a l s o be more w i l l i n g  to  However, t h e s e same h i g h p r i c e d l i n e s of  v e r y w e l l l e s s e n the a t t r a c t i v e power of income groups who  w i l l therefore  be l e s s  o r l e s s w i l l i n g to s u s t a i n t r a v e l c o s t s to shop a t t h a t  that likely centre.  L o u i s P. B u c k l i n , Shopping P a t t e r n s i n an Urban A r e a , IBER S p e c i a l P u b l i c a t i o n s , B e r k e l e y , 1967, pp. 111-12.  79 The suburban shopping c e n t r e e n j o y s c e r t a i n over t h e downtown r e t a i l c o r e and v i c e v e r s a .  advantages  Several studies  have shown t h a t consumers p r e f e r one o u t l e t over t h e o t h e r depending on d i f f e r e n t a s p e c t s o f each.  One s t u d y found  that  consumers tend t o p r e f e r shopping c e n t r e s f o r t h e f o l l o w i n g reasons ( i n order of descending importance): p a r k i n g , g e n e r a l enjoyment, s a l e s and b a r g a i n s .  convenience,  one-stop s h o p p i n g , s e l e c t i o n , and  On t h e o t h e r hand they p r e f e r downtown l o c a -  t i o n s f o r these reasons (again descending i n importance):  selec-  t i o n , c o n v e n i e n c e , e n j o y a b l e e x p e r i e n c e , s a l e s and b a r g a i n s . I n comparing downtown w i t h suburban shopping c e n t r e s , t h e downtown c o r e was p r e f e r r e d over t h e shopping c e n t r e i n terms o f s e l e c t i o n , e n j o y a b l e e x p e r i e n c e , and s a l e s and b a r g a i n s ; b u t t h e shopping c e n t r e ranked ahead o f t h e downtown c o r e i n terms o f c o n v e n i e n c e , 39 p a r k i n g , and one-stop s h o p p i n g .  A n o t h e r s t u d y found t h a t con-  sumers p r e f e r r e d shopping c e n t r e s f o r t h e ease o f r e a c h i n g t h e c e n t r e , f o r t h e t r e a t m e n t by s a l e s p e o p l e , f o r g e n e r a l shopping c o m f o r t , and f o r t h e ease o f h a n d l i n g a d j u s t m e n t s ; whereas they p r e f e r t h e downtown shopping a r e a f o r c h o i c e o f merchandise, 40 p r i c e s , and t h e range i n s i z e s and c o l o u r s o f merchandise.  It  i s e v i d e n t t h a t such p r e f e r e n c e s have an e f f e c t on t h e patronage e x p e c t a n c y , b u t from t h e e a r l i e r d i s c u s s i o n i t s h o u l d a l s o be e v i d e n t t h a t such p r e f e r e n c e s w i l l show v a r i a t i o n a c c o r d i n g t o C o l i n S. J o n e s , R e g i o n a l Shopping C e n t r e s : T h e i r L o c a t i o n , P l a n n i n g and D e s i g n , B u s i n e s s Books L t d . , London, E n g l a n d . 1969. p. 10 q u o t i n g H. L. Waide, "Changing Shopping H a b i t s and T h e i r Impact on Town P l a n n i n g , " Town P l a n n i n g I n s t i t u t e J o u r n a l , O c t o b e r , 1963, p. 258. 40 I b i d . , p. 54 q u o t i n g J . P. A l e v i z o s and A. E. B e c k w i t h , "Shopping H a b i t s , " B u s i n e s s Week, October 24, 1953.  80 the  i n t e r - r e l a t i o n s h i p between demographic  a t t r a c t i o n s o f f e r e d by a p a r t i c u l a r  f a c t o r s and the  outlet.  Geographical Factors G e o g r a p h i c a l b a r r i e r s can l i m i t the t r a d e a r e a and 41 consumer p a t r o n a g e .  limit  The t r a d e a r e a can be c u t o f f a t n a t u r a l  or man-made b a r r i e r s which a r e e i t h e r p h y s i c a l l y o r p s y c h o l o g i c a l l y so o b s t r u c t i v e t h a t nobody w i l l go beyond measurable r e g u l a r i t y .  o r around them w i t h any  A r i v e r o r freeway w i t h no c r o s s o v e r s f o r  s e v e r a l m i l e s can be such a b a r r i e r .  Other b a r r i e r s would  h e a v i l y congested a r t e r i e s , slum d i s t r i c t s , i n d u s t r i a l r a i l w a y l i n e s , and u n p o p u l a t e d r e g i o n s .  include  zones,  R e c o g n i t i o n of the e f f e c t  t h a t such b a r r i e r s can have on consumer s p a t i a l b e h a v i o u r i s e s s e n t i a l i n any l o c a t i o n a l Visibility  analysis.  of the s i t e and c e n t r e from the s u r r o u n d i n g  road network i s g e n e r a l l y c o n s i d e r e d i m p o r t a n t , e s p e c i a l l y i n s m a l l e r c e n t r e s which are l e s s l i k e l y t o a d v e r t i s e o r sponsor promotions. the  To be h i d d e n i s c o n s i d e r e d a d i s a d v a n t a g e because o f  l o s s of a d v e r t i s i n g appeal a f f o r d e d by good exposure. I f a c e n t r e i s l o c a t e d a d j a c e n t t o a major highway, but  i s not v i s i b l e from t h a t highway, i t s a t t r a c t i v e power i s reduced because i t does not appear t o be a c c e s s i b l e . s i t u a t e d i n the m i d d l e o f a j u n g l e of r e t a i l a retail  Furthermore, being facilities,  s t r i p development, n o r m a l l y reduces v i s i b i l i t y  such as and  l e s s e n s the s t a n d - o u t a d v e r t i s i n g e f f e c t which i n t u r n l e s s e n s the  a t t r a c t i v e power o f the f a c i l i t y . Kane, op• c i t . , p. 1 5 .  81 Competition I n a p p r a i s i n g the s a l e s p o t e n t i a l o f a new l o c a t i o n under c o n s i d e r a t i o n , e s t a b l i s h i n g t h a t t h e r e i s a s u f f i c i e n t amount o f t o t a l b u s i n e s s a v a i l a b l e i n t h e new c e n t r e ' s  antici-  pated  necessary  trade area i s only p a r t of the task.  I t i s also  t o s i z e up t h e l i k e l y s i t e s o f new c o m p e t i t i o n as an I n d i c a t i o n o f whether a s a t i s f a c t o r y share o f t h e t o t a l s a l e s p o t e n t i a l 42 can be a t t a i n e d .  A p p r a i s a l o f c o m p e t i t i o n i s a l s o needed f o r  p r o p e r p l a n n i n g r e g a r d i n g t h e s p e c i f i c l o c a t i o n , t h e type and s i z e o f c e n t r e t o b u i l d and t h e m e r c h a n d i s i n g  and o p e r a t i n g  p o l i c i e s t o meet t h e needs and w i s h e s o f customers.  The l o c a t i o n  a n a l y s t then i s concerned w i t h c o m p e t i t i o n a t s e v e r a l l e v e l s : the broad market a r e a , each major c e n t r e which i s i n c o m p e t i t i o n w i t h h i s own, and t h e c o m p e t i t i o n c o n f r o n t i n g t h e i n d i v i d u a l  site.  I n each case t h e a n a l y s i s o f c o m p e t i t i o n i n v o l v e s d e t e r m i n a t i o n o f who i s c o m p e t i t i o n ; t h e amount o f c o m p e t i t i o n , such as t h e number o f c e n t r e s o r s t o r e s , t h e s a l e s volume and square f e e t o f s e l l i n g a r e a ; and t h e q u a l i t y and e f f e c t i v e n e s s o f c o m p e t i t i o n , c o m p r i s i n g such f a c t o r s as p h y s i c a l f a c i l i t i e s , o p e r a t i n g and merchandising  p r a c t i c e s , management, p e r s o n n e l , and consumer  acceptance. The d e v e l o p e r  should have a f a i r l y complete u p - t o - d a t e  i n v e n t o r y o f t h e r e t a i l c o m p e t i t i v e f a c i l i t i e s i n the market area.  T h i s i n f o r m a t i o n i s used t o e v a l u a t e t h e s p e c i f i c  site,  t o a n a l y z e I n d i v i d u a l competing companies, and t o determine which C u r t K o r n b l a u and George L. Baker, "A Guide t o E v a l u a t i n g C o m p e t i t i o n , " i n K o r n b l a u , op. c i t . , p..128.  82 a r e a s are o v e r - s e r v e d  I n c e r t a i n f u n c t i o n s and which areas o f  o p p o r t u n i t y are s t i l l l e f t Competition  open.  i s the aggregate of a l l r e t a i l i n g  facilities  which t o g e t h e r share the t o t a l market p o t e n t i a l - i n o t h e r words, 44 a l l r e t a i l f a c i l i t i e s which s e l l the same types of Any  products.  attempt t o q u a n t i f y c o m p e t i t i o n r e q u i r e s e x t e n s i v e  field  surveys where v a r i o u s elements such as s t o r e s i z e , t e n a n t l a r i t i e s , p a r k i n g , age,  e t c . are mapped and  simi-  c l a s s i f i e d , and  areas  o f c u r r e n t and f u t u r e s t o r e c o n c e n t r a t i o n s can be o b s e r v e d .  When  the c o m p e t i t i o n map  i s superimposed on a p o p u l a t i o n d e n s i t y  map,  i t becomes p o s s i b l e t o d e t e r m i n e which p a r t s of the g e n e r a l  area  are underdeveloped and which p a r t s are overdeveloped p e r c a p i t a with stores.  I f the t r a d e a r e a s of the v a r i o u s competing o u t l e t s  are d e l i n e a t e d , the r e l a t i v e m e r i t s of s i t e s f o r proposed s t o r e s become c l e a r e r which i s of a s s i s t a n c e i n the t a s k o f the g e n e r a l a r e a f o r a new A.  choosing  centre.  Saturation When shopping c e n t r e d e v e l o p e r s  speak of s t o r e " s a t u r a -  t i o n " they mean a c o n d i t i o n where t h e r e i s J u s t the r i g h t amount of s t o r e f a c i l i t i e s i n an a r e a b o t h t o s e r v e customers s a t i s f a c t o r i l y and t o y i e l d a f a i r r e t u r n on i n v e s t m e n t t o the s t o r e 45 operators.  I n t h i s case, s t o r e s a t u r a t i o n i s d e s i r a b l e .  How-  e v e r , t h i s c o n d i t i o n i s an i d e a l which does not u s u a l l y e x i s t , 43  Saul B. Cohen and W. Applebaum, "Major C o n s i d e r a t i o n s i n E v a l u a t i n g a S t o r e S i t e , " i n K o r n b l a u , op. c i t . , p. 88. 44 Ibid. 45 W. Applebaum and S a u l B. Cohen, "Guideposts t o S t o r e L o c a t i o n S t r a t e g y , " i n K o r n b l a u , op. c i t . , p. 29.  83  s i n c e o r d i n a r i l y an a r e a i s e i t h e r u n d e r s t o r e d o r o v e r s t o r e d . When an a r e a i s u n d e r s t o r e d , t h e r e a r e n o t enough f a c i l i t i e s t o s e r v e t h e p o t e n t i a l customers s a t i s f a c t o r i l y .  Existing  shopping  c e n t r e s a r e crowded and customers a r e n o t served w e l l , b u t t h e c e n t r e s y i e l d a good r e t u r n on Investment.  O p e r a t o r s see t h e  e x i s t i n g vacuum and t h e o p p o r t u n i t i e s i t o f f e r s , b u t o f t e n f a c e a difficult  t a s k i n expanding  p r e s e n t f a c i l i t i e s because o f a  l a c k o f space a d j o i n i n g t h e e x i s t i n g c e n t r e .  I n such  cases,  t h e y must l o o k elsewhere f o r a s i t e on which t o develop a new c e n t r e , which can r e s u l t i n two i n e f f i c i e n t c e n t r e s s e r v i n g an a r e a where one l a r g e r c e n t r e would have been more d e s i r a b l e . T h i s p o i n t s o u t t h e c r i t i c a l n e c e s s i t y o f p l a n n i n g f o r growth when c o n t e m p l a t i n g a c e n t r e , and c o n s e q u e n t l y s e c u r i n g t h e r e q u i r e d l a n d f o r expansion w h i l e i t i s s t i l l  a v a i l a b l e , even i f  i t must l i e unused f o r a p e r i o d o f t i m e . When an a r e a i s o v e r s t o r e d , t h e s t o r e s a r e n o t crowded, and f a c i l i t i e s a r e abundant, b u t t h e c e n t r e o p e r a t o r i s l i k e l y 46 n o t g e t t i n g a f a i r r e t u r n on i n v e s t m e n t . I t i s o b v i o u s then t h a t a k e y c o n s i d e r a t i o n f o r d e v e l o p e r s , when c o n t e m p l a t i n g a new c e n t r e , i s t o determine whether t h e a r e a i s u n d e r s t o r e d o r o v e r s t o r e d . ment when completed  I f h i s develop-  s t i l l l e a v e s t h e a r e a u n d e r s t o r e d , he must  r e a l i z e t h e p o t e n t i a l danger o f new competing c e n t r e s b e i n g b u i l t to  s a t i s f y t h e excess p o t e n t i a l , and t h i s may endanger h i s p r o -  f i t a b i l i t y and r e t u r n on i n v e s t m e n t .  O b v i o u s l y , a l s o , he must  a v o i d c o n s t r u c t i n g a c e n t r e i n an a r e a which i s o v e r s t o r e d , f o r 4 6  Ibid.  84 he w i l l l i k e l y n e v e r r e a l i z e a s a t i s f a c t o r y r e t u r n on  investment  u n l e s s the e x i s t i n g f a c i l i t i e s are so o b s o l e t e t h a t h i s  new  c e n t r e w i l l e f f e c t i v e l y c a p t u r e a d i s p r o p o r t i o n a t e share o f the trade.  Normally,  i f s t o r e f a c i l i t i e s are expanded beyond the  needs o f an a r e a , p r o d u c t i v i t y w i l l be r e d u c e d .  T h i s w i l l show  up as l o w e r s a l e s p e r square f o o t o f s e l l i n g area and i n l o w e r profits. B.  Under-supply o f Modern S t o r e s The need f o r new  f a c i l i t i e s can be due to a l a c k of  adequate, modern s t o r e s , even though t h e r e i s an abundance o f old,  obsolete stores.  When the e x i s t i n g c o m p e t i t i v e  are o b s o l e t e , the d e v e l o p e r o f the new  facilities  c e n t r e knows t h a t such  c o m p e t i t i o n i s not r e a l l y as g r e a t as i t would at f i r s t appear on the b a s i s o f r e t a i l  square f o o t a g e I n an a r e a .  The  new  c e n t r e would l i k e l y draw many of the customers away from such obsolete f a c i l i t i e s . 0.  Future Strategy of Any  Competitors  a n a l y s i s o f c o m p e t i t i o n would be Incomplete w i t h o u t  t a k i n g i n t o c o n s i d e r a t i o n what p o s s i b l e f u t u r e measures the comp e t i t i o n could take.  T h i s r e q u i r e s n o t o n l y an e v a l u a t i o n o f  e x i s t i n g s i t e s , but a l s o an i n s i g h t i n t o p o t e n t i a l s i t e s which are r i p e f o r development, and an awareness o f p o p u l a t i o n growth p a t t e r n s and s t o r e development p o l i c i e s and s i t e s e l e c t i o n 47 patterns. I t i s not s a f e t o assume t h a t the c u r r e n t c o m p e t i t i o n S a u l B. Cohen and W. Applebaum, "Major C o n s i d e r a t i o n s i n E v a l u a t i n g a S t o r e S i t e , " i n K o r n b l a u , op. c i t . , p. 89.  85 i s the only competition t h a t w i l l face the centre i n the f u t u r e . T h i s means t h a t t h e d e v e l o p e r must a n a l y z e c o m p e t i t o r s ' p l a n s t o renovate  o l d f a c i l i t i e s o r develop new ones, and must e v a l u a t e  p o t e n t i a l s i t e s which a r e l a r g e enough t o p e r m i t new c e n t r e development. a long l i f e - s p a n .  shopping  Of course a c e n t r e can he unique and have I t can be u n i q u e i n s e v e r a l ways:  when i t i s  the o n l y r e t a i l f a c i l i t y o f i t s type s e r v i n g a g i v e n market a r e a ; when i t i s the o n l y one o f i t s k i n d i n t h e t o t a l c h o i c e o f goods and  s e r v i c e s i t o f f e r s ; o r when i t h a s a "monopoly" l o c a t i o n , so  s t r a t e g i c and f a v o u r a b l e t h a t i t cannot even be approximated by a competitor  ( i n some cases i t may be t h a t t h e c e n t r e s i t e was  the l a s t r e a d i l y a v a i l a b l e p i e c e o f l a n d s u i t a b l e f o r development and t o a c q u i r e a competing s i t e would r e q u i r e e x c e s s i v e l y development). and  expensive  I l l o f t h i s i n f o r m a t i o n i s r e q u i r e d by t h e d e v e l o p e r  each o f h i s t e n a n t s i f t h e y a r e t o know t h e c u r r e n t market  p o t e n t i a l and have some i d e a o f t h e f u t u r e market p o t e n t i a l a v a i l a b l e t o them.  B a s i c a l l y , t h e c o m p e t i t i o n f o r each t e n a n t -  t y p e proposed f o r t h e new c e n t r e s h o u l d be a n a l y z e d  t o determine  whether o r n o t s u f f i c i e n t p o t e n t i a l e x i s t s f o r t h e t e n a n t i n t h e new c e n t r e , and a l s o what p o t e n t i a l does e x i s t which can then be t r a n s l a t e d i n t o square f o o t a g e s t o r e s i z e f o r each t e n a n t i n t h e centre. D.  C o m p e t i t i o n by C l a s s o f Goods 1 l a r g e shopping  areas.  c e n t r e w i l l have two c o n c e n t r i c t r a d i n g  One w i l l be a t r a d i n g a r e a f o r t h e convenience goods  f a c i l i t i e s r o u g h l y e q u i v a l e n t i n s i z e and i n shape t o what i t 48 would be i f t h e convenience f a c i l i t i e s stood t h e r e 4  8  Nelson, op. c i t . , p. 212.  alone.  86 T h e r e f o r e , t h i s t r a d e a r e a should be o u t l i n e d on a map  as i f the  shopping goods f a c i l i t i e s were n o t p r e s e n t a t a l l , and a l l competitive retail  s t o r e s w i t h i n t h i s area should be measured as i f  t h e study were b e i n g made f o r a s e p a r a t e convenience  goods c e n t r e .  The r e a s o n i s t h a t the supermarket w i l l draw b u s i n e s s from a p p r o x i m a t e l y the same t r a d i n g a r e a t h a t i t would have i f t h e department s t o r e and o t h e r b i g s t o r e s were n o t i n the c e n t r e , and  secondly,  i t would secure a d d i t i o n a l b u s i n e s s from i n c i d e n t a l shopping f o r g r o c e r i e s by p e o p l e l i v i n g  beyond the i n n e r a r e a whose p r i n c i p a l  purpose i n coming t o t h e c e n t r e i s to v i s i t the l a r g e r s t o r e s . However, the o p p o s i t e may i t i s more d i f f i c u l t  be t r u e i n some c a s e s , e s p e c i a l l y i f  t o v i s i t t h i s c e n t r e than a r e l a t i v e l y c l o s e -  by non-congested convenience E.  Assessing In  goods c e n t r e .  Competitors the l a r g e r t r a d e a r e a and f o r a number o f m i l e s i n  every d i r e c t i o n beyond i t , a l l major shopping measured. shopping  A l s o , any major shopping  potential.  be  goods o u t l e t s , o t h e r than  c e n t r e s , should a l s o be measured.  include:  centres should  Measurements would  Gross and n e t space, e f f e c t i v e n e s s , and d o l l a r volume The a b i l i t y  o f the new  c e n t r e to compete s u c c e s s f u l l y  w i t h e x i s t i n g c o m p e t i t i o n must be a n a l y z e d - i t i s a l s o n e c e s s a r y to  a n a l y z e whether o r not e x i s t i n g c o m p e t i t i o n w i l l be a b l e to  compete s u c c e s s f u l l y w i t h the proposed new 49 s h o u l d be a n a l y z e d f o r each c o m p e t i t o r :  Kane, op. c i t . , p.  79.  centre.  The  following  87 1.  A v a i l a b i l i t y of parking  2.  A c c e s s i b i l i t y of the store  3.  The c o n g e s t i o n  4.  The a t t r a c t i v e n e s s o f t h e s t o r e f r o n t  5.  The p r i c e , q u a l i t y and q u a n t i t y o f  problem  merchandise i n v o l v e d 6.  The e x i s t e n c e o r l a c k o f a i r c o n d i t i o n i n g and e s c a l a t o r s  7.  Merchandising a b i l i t y o f the store  8.  A t t r a c t i v e n e s s of the decor  9.  Age o f t h e s t o r e  Age and appearance a r e i m p o r t a n t i t e m s t o c o n s i d e r  because  e v e r y s t o r e , even t h e b i g g e s t and s h o w i e s t , w i l l p r o g r e s s i n t o a shop-worn o l d age i f n o t renewed p e r i o d i c a l l y . Old age can be c h a r a c t e r i z e d by p h y s i c a l d e t e r i o r a t i o n :  l a c k o f f l o o r space,  shabby s h e l v i n g and f i x t u r e s , faded p a i n t , worn f l o o r t i l e s , i n adequate p a r k i n g , weather-beaten s i g n s , and a d e c l i n e i n employee 50 confidence. The l o c a t i o n a l p a t t e r n of t h e c o m p e t i t i o n s t r a t e g i c questions  t o the a n a l y s t .  As he s t u d i e s  presents competitive  p o s i t i o n i n g i n r e l a t i o n t o h i s own l o c a t i o n , he w i l l b e g i n t o g e t a f i n a l impression questions  o f what t h e p r o p e r t y  i s worth.  Perhaps t h e main  t o be asked a t t h i s j u n c t u r e a r e : Can more p e o p l e i n t h e  t r a d i n g a r e a g e t t o o u r s i t e more e a s i l y t h a n t h a t o f any o t h e r centre?  I f n o t , how many p e o p l e can r e a c h us w i t h o u t p a s s i n g our  competitors  first?  I b i d . , p. 127.  W i l l o u r l o c a t i o n a l advantages be as good t e n  88 y e a r s from now  as they are  today?  The types o f o p e r a t i o n s the new  c e n t r e must compete w i t h  a r e a v i t a l m a t t e r , e s p e c i a l l y i n r e l a t i o n to the type o f s t o r e that i s planned.  Does the c o m p e t i t i o n s t r e s s low p r i c e , h i g h  q u a l i t y , customer s e r v i c e , s p e c i a l t r a d i n g stamps, l a t e 51 Sunday hours? Once c o m p e t i t i v e f a c i l i t i e s have been p l o t t e d  hours,  and  t a b u l a t e d , s u b j e c t i v e judgments must be made on the c e n t r e ' s t r a d e i n t e r c e p t i o n p o t e n t i a l , the power of the proposed c e n t r e to capt u r e some measure o f the b u s i n e s s n o r m a l l y g i v e n to the o t h e r 52 centres.  The assessment of the degree o f i n t e r c e p t i o n should  be based on the c h a r a c t e r i s t i c t h a t shoppers w i l l not go p a s t  one  c e n t r e t o another h a v i n g e q u a l f a c i l i t i e s , and w i l l p a t r o n i z e the nearest centre ( a l l other t h i n g s being equal).  Greatest  inter-  c e p t i o n w i l l o c c u r w i t h the customers o f o t h e r c e n t r e s whose n o r mal r o u t e p a s s e s the s u b j e c t l o c a t i o n , and the e x t e n t o f t h i s p o t e n t i a l must be gauged from the survey o f c o m p e t i t i o n o u t l i n e d above. Ill  such q u e s t i o n s r e g a r d i n g the c o m p e t i t i v e c l i m a t e  w i t h i n w h i c h the proposed c e n t r e must operate w i l l have a d i r e c t b e a r i n g on the p o t e n t i a l consumer p a t r o n a g e and the p o t e n t i a l s a l e s volume which w i l l be a v a i l a b l e t o the new  centre.  51 §§  I b i d . , p.  79.  V. Gruen and L. Smith, Shopping Towns USA: The P l a n n i n g o f Shopping C e n t r e s , New York, R e i n h o l d P u b l i s h i n g Corp., I 9 6 0 , p. 35. 53 N e l s o n , op. c i t . , p. 54.  89  Market Share Of equal importance to the n e c e s s i t y o f e s t i m a t i n g the total potential retail  e x p e n d i t u r e i n the t r a d e area i s the  necessity to evaluate a centre's prospects f o r penetrating t h i s t r a d e a r e a and  c a p t u r i n g a s a t i s f a c t o r y share of the market 54  expenditure p o t e n t i a l .  I t i s t h i s share which i s c o n s i d e r e d  be the c e n t r e ' s p o t e n t i a l s a l e s volume.  to  Market share i s the p r o -  p o r t i o n of t o t a l p o t e n t i a l s a l e s t h a t a s t o r e or c e n t r e 55  captures  from a g i v e n a r e a . To e s t i m a t e what p e r c e n t a g e o f the t o t a l r e t a i l t u r e o f the a r e a w i l l be a t t r a c t e d t o the p r o j e c t e d  expendi-  shopping  c e n t r e i s a v e r y d i f f i c u l t t a s k , and i s commonly s u b j e c t to e r r o r s i n judgment.  The d e v e l o p e r d e s i r i n g to open a c e n t r e i n a  l o c a t i o n , and who  new  has the e x p e r i e n c e o f s a l e s volumes r e a l i z e d i n  o t h e r c e n t r e s , o f t e n compares the p o p u l a t i o n and buying power of the t r a d e areas of o p e r a t i n g c e n t r e s w i t h t h a t o f the t r a d e for  the new  location.  area  V a r i o u s methods o f a s c e r t a i n i n g market  share are d i s c u s s e d i n l a t e r c h a p t e r s but the d e t e r m i n a t i o n  of  market share commonly i n v o l v e s s t u d y i n g the r e p u t a t i o n o f the t e n a n t s , s i z e of the c e n t r e , c o m p e t i t i o n , a c c e s s , t r a n s p o r t a t i o n f a c i l i t i e s , income d i s t r i b u t i o n , the n a t u r e and e x t e n t o f merchand i s e o f f e r e d i n the c e n t r e , and i n f a c t most o f the o t h e r f a c t o r s mentioned i n t h i s  chapter.  S a u l B. Cohen and ¥. Applebaum, "Major C o n s i d e r a t i o n s i n E v a l u a t i n g a S t o r e S i t e , " i n K o r n b l a u , op. c l t . , p. 9 3 . 5 5  Ibid.  90 Site Factors There are v a r i o u s f a c t o r s c o n c e r n i n g the c e n t r e  itself  w h i c h , i f c o n s i d e r e d when p l a n n i n g the f a c i l i t y , can c r e a t e l o c a t i o n a l advantages f o r the c e n t r e which i n t u r n enhance i t s a t t r a c t i v e power. L o c a t i o n i t s e l f i s not the o n l y f a c t o r d e t e r m i n i n g  the  l e v e l o f s u c c e s s o f the o p e r a t i o n , o r even the b u s i n e s s volume. C e n t r e s t h a t o f f e r the b e s t r e t a i l i n g f a c i l i t i e s can expect outperform  t h e i r i n f e r i o r competitors.  I f a d e v e l o p e r can  to develop  the dominant, most a t t r a c t i v e f a c i l i t i e s i n the a r e a , then he  can  expect t o a c h i e v e a h i g h e r l e v e l o f s a l e s than i f p o o r e r  facilities  were d e v e l o p e d .  new  T h e r e f o r e , the planned  c h a r a c t e r o f the  f a c i l i t i e s can have an a l l - i m p o r t a n t b e a r i n g on the c e n t r e ' s expected  s a l e s volume. The f o l l o w i n g can be c o n s i d e r e d a t t r a c t i v e a s p e c t s o f  the centre:  s t o r e s i z e s and c e n t r e s i z e ; a t t r a c t i v e d e s i g n  l a y o u t ( a t t r a c t i v e d e c o r , good i n t e r - s t o r e c i r c u l a t i o n ,  and  covered  m a l l s , a i r c o n d i t i o n i n g ) ; s t o r e and t e n a n t - t y p e s ; merchandise mix, merchandising  a b i l i t y o f the t e n a n t s , b r e a d t h o f s e l e c t i o n , range  o f s i z e s , c o l o u r s , and  s t y l e s ; r e g u l a r l y c o m p e t i t i v e p r i c e s and  m a r k e t - o r i e n t e d p r i c i n g p o l i c i e s ; the r e p u t a t i o n of the c e n t r e and the r e p u t a t i o n o f i t s p r i n c i p a l t e n a n t ; the image o f the c e n t r e as t o whether o r not i t i s h i g h o r low q u a l i t y o r i s an a t t r a c t i v e and e n j o y a b l e p l a c e t o v i s i t ; the adequacy of the s e r v i c e ; adequate p a r k i n g ; a m e n i t i e s such as r e s t a u r a n t s , r e s t rooms, and community f a c i l i t i e s ; the hours o f b u s i n e s s ; and a d v e r t i s i n g and p r o m o t i o n a l programs.  All  the l e v e l o f b u s i n e s s volume which the new achieve.  the  o f these can i n f l u e n c e c e n t r e can expect t o  91 S t o r e S i z e and Centre As l o n g as t h e d e v e l o p e r  Size  i s n o t r e s t r i c t e d hy l a n d  a v a i l a b i l i t y , z o n i n g r e s t r i c t i o n s , o r monetary c o n s i d e r a t i o n s , the s i z e o f t h e c e n t r e should be c l o s e l y r e l a t e d t o the buying p o t e n t i a l o f t h e a r e a t o which i t belongs.-' The l a r g e r c e n t r e s o f f e r a b r e a d t h and depth o f a s s o r t ment which s e r v e s as a magnet f o r drawing a l a r g e volume o f customers and drawing them from g r e a t e r d i s t a n c e s .  W i t h extreme  s i z e , a c e n t r e may a t t a i n a p o s i t i o n o f a r e a dominance, and shoppers tend t o be more a t t r a c t e d t o a shopping 57 s i z e of that f a c i l i t y  increases.  facility  as t h e  I f a centre i s considerably  l a r g e r than any o f i t s c o m p e t i t o r s , then i t s t r a d e a r e a w i l l be more e x t e n s i v e t h a n t h e t r a d e a r e a o f a s m a l l e r c e n t r e i f t h e l a r g e r c e n t r e o f f e r s more f u n c t i o n s . a l a r g e centre w i l l  enjoy a broader  especially  But t h e degree t o which  t r a d e a r e a i s o f course  t i o n e d by l o c a t i o n a l f a c t o r s such as t r a f f i c  likely  congestion,  condi-  road  p a t t e r n s , competition, e t c . G e n e r a l l y speaking, the l a r g e r the c e n t r e and t h e more f u n c t i o n s o f f e r e d , t h e more e x t e n s i v e w i l l be 58 the t r a d e a r e a .  I f a new c e n t r e i s planned  too small to handle  the p o t e n t i a l volume w i t h i n i t s t r a d e a r e a , i t may a t f i r s t be v e r y s u c c e s s f u l , but e v e n t u a l l y l a r g e r c e n t r e s o f f e r i n g more f u n c t i o n s t o s e r v e t h e p o t e n t i a l customers w i l l draw customers away from t h e s m a l l e r c e n t r e l e a v i n g i t w i t h a s m a l l e r than optimum 56 Kane, op. c l t . , p. 121. 57 S a u l B. Cohen and W. Applebaum, "Major C o n s i d e r a t i o n s i n E v a l u a t i n g a S t o r e S i t e , i n K o r n b l a u , op. c i t . , p. 9 . 58 W. Applebaum and S a u l B. Cohen, "Guideposts t o S t o r e l o c a t i o n S t r a t e g y , " i n K o r n b l a u , op. c i t . , p. 33. A  92 t r a d e a r e a and reduced drawing power. s h o u l d e i t h e r have "been planned  In such a c a s e , the  centre  as a s m a l l e r neighbourhood o r  community c e n t r e , or I t s m e r i t s as a l a r g e r r e g i o n a l c e n t r e  should  59  have been c o n s i d e r e d . A.  Centre S i z e and Cumulative  Attraction  The t h e o r y o f c u m u l a t i v e generation states that:  a t t r a c t i o n or  cumulative  "A g i v e n number o f s t o r e s d e a l i n g i n the  same merchandise w i l l do more b u s i n e s s i f t h e y are l o c a t e d  adjacent  o r i n p r o x i m i t y to each o t h e r than i f they are w i d e l y s c a t t e r e d . " ^ Up t o a p o i n t c u m u l a t i v e  increments  0  to a c e n t r e ' s a t t r a c t i v e power  a r i s e when more s t o r e s are grouped t o g e t h e r .  I t w i l l be noted  later  t h a t t h e r e i s an upper l i m i t t o the number o f s t o r e s which can grouped t o g e t h e r beyond which i n e f f i c i e n c i e s o c c u r .  be  A, g r o u p i n g  s t o r e s a t t r a c t s a t o t a l s a l e s volume which i s l a r g e r than the  of sum  o f the s a l e s volumes each one o f them would a t t r a c t s e p a r a t e l y , owing t o the extended t r a d i n g a r e a and i n c r e a s e d market p e n e t r a t i o n which r e s u l t s from t h e i r mutual a s s o c i a t i o n i n the shopping  centre.  Of course an adequate market p o t e n t i a l must e x i s t f o r each s t o r e i n the c e n t r e or t h e i r i n c l u s i o n i n the c e n t r e w i l l not augment t h a t c e n t r e ' s a t t r a c t i v e power. The  combined drawing power o f a l l s t o r e s i n a r e g i o n a l  c e n t r e d e t e r m i n e s the t r a d e a r e a and volume of customer b u s i n e s s . Although  the o u t e r l i m i t s of a c e n t r e ' s t r a d e a r e a are determined  by the drawing power o f i t s most p o w e r f u l 59  s t o r e , every s t o r e i n  S a u l B. Cohen and W. Applebaum, "Major C o n s i d e r a t i o n s , " i n K o r n b l a u , op. c i t . , p. 96. K e l s o n , op. c i t . , p.  58.  93 the c e n t r e draws b u s i n e s s from a l l p a r t s of the t r a d e a r e a w i t h an i n t e n s i t y which d i m i n i s h e s a t a d i f f e r e n t r a t e w i t h i n c r e a s i n g d i s t a n c e owing to the v a r y i n g d i s t a n c e t h r e s h o l d s f o r d i f f e r e n t c l a s s e s of m e r c h a n d i s e .  This i s a l s o r e f l e c t e d i n v a r i a t i o n s  i n the share o f market p o t e n t i a l a c h i e v e d .  The  tenant  cannot  always assume t h a t the t r a d e a r e a f o r h i s s t o r e w i l l be  extended  as a r e s u l t o f b e i n g a s s o c i a t e d w i t h o t h e r s t o r e s , s i n c e t h e i r d r a w i n g power may  be no g r e a t e r than h i s own.  However, g e n e r a l l y  s p e a k i n g , most s m a l l e r r e t a i l o u t l e t s do i n c r e a s e t h e i r drawing power by a s s o c i a t i n g w i t h a l a r g e department s t o r e i n a r e g i o n a l centre.  F u r t h e r m o r e , they o f t e n f i n d t h a t t h e i r share of the  market (market p e n e t r a t i o n ) w i l l be h i g h e r due  to the  higher  d r a w i n g power of the c e n t r e as a whole. B.  Maximum v s . Optimum Centre S i z e Over the y e a r s , the tendency has been to c o n s t r u c t  l a r g e r centres.  ever  T h i s tendency i s the r e s u l t of an attempt to  f i n d the optimum overhead p o i n t - the p o i n t a t which average overhead and o p e r a t i n g c o s t s are l o w e r p e r d o l l a r of s a l e s .  The  c o m p e t i t i v e f a c t o r i s a l s o somewhat i n v o l v e d (on the t h e o r y  that  o t h e r t h i n g s b e i n g e q u a l , p e o p l e p r e f e r t o p a t r o n i z e the l a r g e s t m a r t , which h a s , presumably, the l a r g e s t s e l e c t i o n ) , as w e l l as the b e l i e f t h a t i n v u l n e r a b i l i t y i n c r e a s e s w i t h I t i s c l e a r , however, t h a t no one  size.  size or design  will  p r o v e t o be the most e f f e c t i v e f o r a l l neighbourhoods and a l l situations.  There i s a l s o c e r t a i n l y some p o i n t a t which i n c r e a s e d  s i z e w i l l not r e s u l t i n l o w e r o p e r a t i n g c o s t s , i n f a c t , a t t h i s point operating costs w i l l increase, # has  A l t h o u g h t h e r e i s r e c e n t e v i d e n c e to suggest t h a t t h i s tendency diminished.  94 The answer to t h i s q u e s t i o n o f optimum s i z e i s c r i t i c a l as f a r as l o c a t i o n i s concerned.  I t i s not o n l y a q u e s t i o n o f the  c o s t of the p a r c e l of l a n d i n v o l v e d , but a l s o a q u e s t i o n of l o c a t l o n a l f a c t o r s connected w i t h s i z e .  A v e r y l a r g e c e n t r e must have  a v e r y much l a r g e r t r a d i n g a r e a t h a n a s m a l l one, and the need t h e r e f o r e f o r access t o l a r g e p o p u l a t i o n s i m p l i e s a s e t o f  site  c h a r a c t e r i s t i c s q u i t e d i f f e r e n t from those o f a neighbourhood 61 super market.  The most i m p o r t a n t f a c t o r i n the s i z e d e c i s i o n  i s the d e t e r m i n a t i o n o f the optimum number o f square f e e t o f s e l l i n g a r e a r e q u i r e d t o s e r v i c e the p o t e n t i a l t r a d e a r e a .  Too  l a r g e a f a c i l i t y w i l l have low s a l e s p e r square f o o t , and too s m a l l a f a c i l i t y w i l l n o t be a b l e t o s e r v e the p o p u l a t i o n , w i l l become v e r y congested,  and w i l l not be a b l e t o t a k e advantage of a l l the  b u s i n e s s t h a t i t might be a b l e t o get i f i t were the optimum s i z e . C.  Size vs. Available P o t e n t i a l The  s i z e o f a planned  c e n t r e should be most d i r e c t l y 62  r e l a t e d to i t s p r o j e c t e d sales p o t e n t i a l ,  but c o m p e t i t i v e  a n t i c i p a t e d t r a d i n g a r e a , growth and o t h e r c i r c u m s t a n c e s t i o n must be f a c t o r e d i n t o the d e c i s i o n as w e l l .  size,  of l o c a -  F u r t h e r m o r e , the  s i z e o f each t e n a n t ' s o p e r a t i o n must be geared t o the market potent i a l f o r h i s type o f o p e r a t i o n .  I t i s apparent t h a t i f one o f the  i n d i v i d u a l t e n a n t s i n the c e n t r e has occupied  space which i s too  l a r g e f o r h i s s a l e s volume p o t e n t i a l , then h i s r e n t s are too h i g h for  the volume p o t e n t i a l , and h i s p r o f i t a b i l i t y , t h e r e f o r e , w i l l I b i d . , p.  38.  I b i d . , p.  146.  95 s u f f e r , endangering  h i s a b i l i t y t o c o n t i n u e t o pay r e n t , which i n  t u r n endangers h i s a b i l i t y t o remain as a t e n a n t .  Of course i n  t h i s case t h e d e v e l o p e r stands t o l o s e r e n t a l Income which would inevitably affect his profit l e v e l .  T h e r e f o r e , i t i s v e r y impor-  t a n t t h a t t h e i n d i v i d u a l t e n a n t s i n t h e c e n t r e occupy o n l y t h a t space which can p r o v i d e an optimum s a l e s p o t e n t i a l p e r square f o o t of area.  Q u e s t i o n s must be answered such a s : W i l l more space  i n c r e a s e t h e volume p o t e n t i a l , w i l l t h e r e be enough space t o d i s p l a y t h a t range o f goods n e c e s s a r y  t o c a p t u r e t h e maximum p o t e n t i a l  a v a i l a b l e i n t h e t r a d e a r e a , and b a s i c a l l y , what i s t h e p r o p e r amount o f space r e q u i r e d t o handle any g i v e n e s t i m a t e d volume potential?  A l s o , i s t h e r e a good p o p u l a t i o n growth p o t e n t i a l i n  t h e t r a d i n g area?  I f t h e r e i s , t h e r e might be no c h o i c e b u t t o  b u i l d t h e l a r g e r f a c i l i t y now o r e l s e f a c e t h e b o t h e r o f expanding i n two o r t h r e e y e a r s , o r even more d a n g e r o u s l y , f a c e t h e p r o s p e c t o f c o m p e t i t i o n moving i n and b u i l d i n g f a c i l i t i e s  designed  t o cap-  t u r e t h e untapped market p o t e n t i a l which cannot be handled a t this facility.  A c e n t r e s i z e t h a t i s j u s t r i g h t today but w i l l  be t o o s m a l l i n a y e a r r e p r e s e n t s as s e r i o u s an e r r o r as b u i l d i n g i t too small t o begin w i t h .  A p r o j e c t i o n should t h e r e f o r e be made  o f p o s s i b l e b u s i n e s s i n c r e a s e s over t h e p e r i o d o f t h e l e a s e , and the c e n t r e designed D.  t o h a n d l e t h i s a n t i c i p a t e d i n c r e a s e i n volume.  S i z i n g f o r the Future In p r a c t i c e , shopping  c e n t r e s a r e o f t e n developed t o  h a n d l e t h e f u t u r e market p o t e n t i a l , n o t t h e e x i s t i n g  I b i d . , p. 145.  potential.^  3  96 Such c e n t r e s are sometimes u n p r o f i t a b l e i n the b e g i n n i n g , the t r a d e a r e a i s s t i l l i n a growth p r o c e s s , may  and  because  s a l e s and  be s u b s t a n t i a l l y below the p r o j e c t e d p o t e n t i a l .  profits  However, i n  a y e a r o r more the i n c r e a s e d p o p u l a t i o n i n the t r a d e a r e a and  the  i n c r e a s i n g f a m i l i a r i t y of the c e n t r e i n the a r e a o f t e n r e s u l t i n a d d i t i o n a l s a l e s t h a t are s u f f i c i e n t t o p e r m i t the achievement of profit E.  goals.  S i z e v s . R e q u i r e d Minimum S a l e s P e r Square Foot Perhaps the most s e n s i b l e method of d e t e r m i n i n g  the  optimum s t o r e space f o r each t e n a n t would be t o d e t e r m i n e what s a l e s l e v e l p e r square f o o t each t e n a n t f e e l s i s the n e c e s s a r y minimum b e f o r e  t h e i r o p e r a t i o n can become p r o f i t a b l e .  n a t i o n a l department s t o r e and s h o u l d have a f a i r l y  Each  each e x p e r i e n c e d l o c a l c h a i n  store  c l e a r i d e a on the s a l e s p e r square f o o t l e v e l  t h a t must be a t t a i n e d b e f o r e  the o p e r a t i o n w i l l be p r o f i t a b l e .  T a k i n g t h e s e s a l e s p e r square f o o t f i g u r e s , i t i s p o s s i b l e to estimate for  the s i z e r e q u i r e d by d i v i d i n g the s a l e s volume p r o j e c t i o n  t h a t f a c i l i t y by the n e c e s s a r y s a l e s p e r square f o o t f i g u r e t o  a r r i v e a t the number of square f e e t n e c e s s a r y t o s e r v e t h a t volume potential.  However, i t must be noted t h a t t h i s p r o c e s s i n v o l v e s  c i r c u l a r reasoning,  s i n c e t h a t volume p o t e n t i a l i s i t s e l f based  on a p r i o r s i z e a s s u m p t i o n . F.  Tenant S i z e v s . A f f o r d a b l e  Rent  The proposed r e n t has a l a r g e b e a r i n g upon s t o r e s i z e t o o , because the r e n t should  be no more t h a n a c e r t a i n p e r c e n t a g e  o f the t e n a n t s expected s a l e s .  So, f o r example, i f a r e t a i l e r ' s  97 expected s a l e s are $50,000 p e r month, and from p a s t e x p e r i e n c e he knows t h a t he  can pay no more than 5% of t h a t i n r e n t , then  d i v i d i n g t h r o u g h by the r e n t p e r square f o o t w i l l g i v e him number o f square f e e t t h a t he would be:  a s t o r e has  can a f f o r d to r e n t .  the  (An example  $30,000 p e r week p o t e n t i a l and  needs  $ 2.50  p e r square f o o t to be p r o f i t a b l e , so 030,000 d i v i d e d  $ 2.50  e q u a l s 12,000 square f e e t . )  T h e r e f o r e i f the weekly s a l e s  volume p o t e n t i a l i s d e t e r m i n e d , and has  ascertained  by  the a n a l y s t or t h e d e v e l o p e r  the weekly s a l e s p e r square f o o t t h a t each t e n a n t  t y p e must r e q u i r e t o break even and make a p r o f i t , then he  divides  the weekly s a l e s volume p o t e n t i a l f o r each t e n a n t by each t e n a n t ' s break-even s a l e s p e r square f o o t to get the number of square f e e t for  break-even o p e r a t i o n .  There i s no  sophisticated formula f o r  a n t i c i p a t i n g the number of square f e e t of s e l l i n g a r e a r e q u i r e d  to  h a n d l e a p o t e n t i a l volume, but r a t h e r the a n a l y s t makes an e m p i r i c a l survey of r e t a i l  t y p e s and d e t e r m i n e s from t h i s survey what s a l e s  p e r square f o o t l e v e l s a r e c o n s i d e r e d  necessary i n p r a c t i c e .  I n summary, the c e n t r e s i z e and t e n a n t o c c u p i e s should the t r a d e a r e a .  the space t h a t each  c o i n c i d e w i t h the p r o j e c t e d p o t e n t i a l of  However, i t must always be remembered t h a t  the  s i z e assumed f o r the c e n t r e has a d i r e c t b e a r i n g  on the  volume t h a t w i l l l i k e l y m a t e r i a l i z e .  when e s t i m a t i n g  Therefore,  sales  p o t e n t i a l s a l e s volumes f o r a proposed c e n t r e , the e s t i m a t e depend to some e x t e n t on the p r i o r s i z e a s s u m p t i o n :  alterations  i n t h i s s i z e assumption can a l t e r the a t t r a c t i v e power of c e n t r e which w i l l i n t u r n a f f e c t the consumer patronage and  the c o r r e s p o n d i n g s a l e s volume  estimate.  will  the estimate  98 Design and L a y o u t In o r d e r f o r t h e d e v e l o p e r t o ensure t h a t h i s  shopping  c e n t r e i s a t t r a c t i v e and t h e r e f o r e w i l l draw l a r g e r b u s i n e s s volumes, i t i s n e c e s s a r y t h a t h i s l a y o u t be c o n v e n i e n t and effective.  F o r example, t h e department s t o r e should n o t be l o c a t e d  a c r o s s t h e p a r k i n g l o t from a l l t h e o t h e r s t o r e s . g e n e r a t o r i n t h e shopping  The major  c e n t r e must be so p l a c e d t h a t  and e x i t s from t h e shopping  entrances  centre w i l l f o r c e the p e d e s t r i a n s t o  walk p a s t t h e o t h e r f a c i l i t i e s i n t h e c e n t r e i n o r d e r to r e a c h t h e major g e n e r a t o r .  I f t h i s i s n o t done these o t h e r s t o r e s w i l l be  by-passed and w i l l n o t be v e r y s u c c e s s f u l . The c e n t r e as a whole 64  w i l l be l e s s s u c c e s s f u l and p o s s i b l y u n p r o f i t a b l e . V a r i o u s t y p e s o f t e n a n t s must be p l a c e d t o g e t h e r so t h a t dead areas a r e n o t c r e a t e d , and t h e c e n t r e arranged f o r shoppers' convenience.  Store f a c i l i t i e s  should i n c l u d e v a r i o u s s e r v i c e shops  ( b a r b e r and beauty f o r example) i n o r d e r t h a t t h e c e n t r e p r o v i d e s some o f t h e s e r v i c e s a s s o c i a t e d w i t h a shopper's goods trip.  shopping  They t o o must be p r o p e r l y l o c a t e d i n t h e l a y o u t o f t h e  shopping  centre.  They should n o t be i n a h i g h t r a f f i c  area,  because they a r e n o t h i g h volume p r o d u c e r s , so they would n o t maximize the p r o f i t a b i l i t y o f t h e c e n t r e i n a h i g h t r a f f i c The d e s i g n o f shopping  location.  centres i s i n e v i t a b l y t i e d to  a s e l e c t i o n o f t e n a n t t y p e s which must be so arranged as t o generate p e d e s t r i a n t r a f f i c  throughout  the c e n t r e .  The dominant  t e n a n t I s u s u a l l y a n x i o u s t o g a i n what he deems t o be t h e most desirable location. I b i d . , p. 236.  I n a shopping  c e n t r e , i f t h e department s t o r e  99 hogs the road f r o n t a g e and has i t s own  p a r k i n g l o t , there i s no  n a t u r a l p e d e s t r i a n f l o w back p a s t the o t h e r s t o r e s i n which case  65 these s t o r e s s u f f e r .  l l s o , i t would be unwise to p l a c e  department s t o r e a t the e n t r a n c e  the  t o the c e n t r e because the pedes-  t r i a n s would go no f u r t h e r down the m a l l and  the v a r i o u s  facilities  p l a c e d i n the m a l l would r e c e i v e v e r y l i t t l e t r a f f i c f l o w p a s t t h e i r windows. are arranged entrance  The  b e s t l a y o u t i s one i n which the  so as to c r e a t e a f l o w - t h r o u g h  t o the o t h e r e n t r a n c e  facilities  s i t u a t i o n from  on a n o t h e r s i d e of the  one  centre.  S i m i l a r l y , i n a two l e v e l shopping c e n t r e , i f one f l o o r i s w i t h o u t a major magnet, then the consumers w i l l not take the t r o u b l e to v i s i t that f l o o r .  O b v i o u s l y , the l a y o u t of the c e n t r e can  certainly  a f f e c t the p r o f i t a b i l i t y f o r each t e n a n t , b u t I t can a l s o have a l a r g e a f f e c t on c r e a t i n g a p l e a s i n g image i n the minds of the consumers who  v i s i t t h a t c e n t r e , a f a c t which i n c r e a s e s the consumer's  enjoyment of shopping a t t h a t c e n t r e , and  consequently  enhances  the c e n t r e ' s a t t r a c t i v e power. T h i s t h e s i s i s not concerned w i t h the a c t u a l placement of the i n d i v i d u a l t e n a n t types w i t h i n the shopping c e n t r e , except to  say t h a t p o o r l a y o u t examples such as the p r e c e d i n g  can  alter  the a t t r a c t i v e n e s s of the shopping c e n t r e and t h e r e b y harm i t s d r a w i n g power.  Therefore, i t i s extremely  shopping c e n t r e d e v e l o p e r  important  employ an a r c h i t e c t who  t h a t the  i s thoroughly  f a m i l i a r w i t h the p r i n c i p l e s of s u c c e s s f u l shopping c e n t r e  design  so t h a t he w i l l ensure t h a t the l a y o u t enhances the shopping c e n t r e ' s drawing power and i s not d e t r i m e n t a l to i t . I b i d . , p.  243.  Generally  100 s p e a k i n g , s t o r e s e l e c t i o n should he made i n accordance w i t h t h e volume e s t i m a t e s determined  i n t h e economic s t u d y , and t h e a r r a n g e -  ment should ensure c o m p a t i b l e g r o u p i n g s c e n t r e ' s drawing  s i n c e they enhance t h e  power.  B r i g h t , a t t r a c t i v e , c o l o u r f u l d e c o r , modern a e s t h e t i c d e s i g n and m a t e r i a l s , covered m a l l s , a i r c o n d i t i o n i n g , and s p a c i o u s n e s s a l s o enhance t h e c e n t r e ' s a t t r a c t i v e image which a f f e c t s i t s drawing  power. S t o r e Types - Tenant Types  In  each shopping  centre, there i s t h e o r e t i c a l l y a best  s e l e c t i o n o f t e n a n t s which w i l l g e n e r a t e t h e most b u s i n e s s and produce t h e most income.  A l t h o u g h i n many cases t h i s w i l l n o t be  p o s s i b l e , t h e d e v e l o p e r should n e v e r t h e l e s s attempt  t o come as  c l o s e t o t h i s i d e a l as p o s s i b l e . In  j u d g i n g t e n a n t s , t h e d e v e l o p e r should examine t h e i r  a d v e r t i s i n g budget, apparent  a g g r e s s i v e n e s s , completeness o f  stock, r e p u t a t i o n , merchandising  ability,  stability,  generating  power, p r i c i n g p o l i c i e s , t h e i r v a r i o u s o f f e r i n g s , and whether o r not they a r e geared  t o s u p p l y goods t o t h e l o w income, m i d d l e  income o r h i g h income groups t h a t a r e found i n t h i s p a r t i c u l a r trade area. Every shopping and secondary  tenants.  c e n t r e has what a r e known as key t e n a n t s The key t e n a n t i n a r e g i o n a l shopping  c e n t r e would be a department s t o r e , and t h e key t e n a n t i n t h e s m a l l e r c e n t r e s might be a supermarket.  S m a l l e r t e n a n t s pay  h i g h e r r e n t charges p e r square f o o t t h a n k e y t e n a n t s , s i n c e key t e n a n t s a r e g i v e n a c o n c e s s i o n t o e n t e r t h e c e n t r e as a t e n a n t i n the f i r s t p l a c e .  101 A p a r t from the key t e n a n t s , the type and r e q u i r e d a r e a o f each t e n a n t w i l l he d i r e c t l y r e l a t e d t o :  1) The amount o f  t r a d e done i n any p a r t i c u l a r good by the key t e n a n t . 2)  The  e s t i m a t e d p o t e n t i a l s a l e s as c a l c u l a t e d i n the economic s u r v e y . A.  Tenants v s . P o t e n t i a l L o c a t i o n f i n d i n g s have a major b e a r i n g on which t e n a n t s  s h o u l d be i n c l u d e d i n the c e n t r e , i n the sense t h a t i t must be determined  t h a t p o t e n t i a l e x i s t s f o r t h a t type o f t e n a n t i n t h a t  c e n t r e , and t h e n beyond t h a t what amount o f space i s r e q u i r e d f o r t h a t t e n a n t i n the c e n t r e .  The d e v e l o p e r s should conduct a market  s u r v e y of the c o m p e t i t i o n e x i s t i n g f o r each f u n c t i o n which he to  i n c l u d e i n h i s shopping  sales potential s t i l l  plans  c e n t r e i n o r d e r t o i n s u r e adequate  e x i s t s f o r the t e n a n t type t h a t he i s p r o -  posing to i n c l u d e . B.  Tenants as A t t r a c t o r s The t e n a n t t y p e s a v a i l a b l e I n a c e n t r e w i l l have a major  b e a r i n g on the c e n t r e ' s a t t r a c t i v e power i n i t s t r a d e a r e a . haps the most o v e r r i d i n g c o n s i d e r a t i o n i s t h a t the t e n a n t  Per-  offerings  w i t h i n the c e n t r e match as c l o s e l y as p o s s i b l e the p o t e n t i a l i n that centre's trade area.  The b e t t e r the match, the more a t t r a c -  t i v e the c e n t r e w i l l be t o i t s t r a d e a r e a .  The more a t t r a c t i v e  t h e c e n t r e , the more b u s i n e s s w i l l accrue t o the c e n t r e .  I f the  t e n a n t s e l e c t i o n does not match the t r a d e a r e a , t h i s w i l l  be  d e t r i m e n t a l t o the c e n t r e ' s a t t r a c t i v e power. In  s e l e c t i n g major t e n a n t s f o r a shopping  centre, i t i s  i m p o r t a n t t o r e a l i z e t h a t b e t t e r known t e n a n t s v e r y o f t e n have b e t t e r consumer acceptance  s i n c e many o f the people  i n a trade  102 a r e a a l r e a d y shop a t t h e i r s t o r e s i n o t h e r l o c a t i o n s .  Furthermore,  i t i s a l s o i m p o r t a n t t o r e a l i z e t h a t the a d v e r t i s i n g programs c a r r i e d on by these b e t t e r t e n a n t s may  have a s i g n i f i c a n t l y  broader  coverage i n the market a r e a because o f t h e i r l o c a t i o n s elsewhere i n the g e n e r a l r e g i o n , and t h i s higher-powered a d v e r t i s i n g can have a s i g n i f i c a n t impact on the drawing power of the c e n t r e .  I f the  t e n a n t I s w e l l known t o shoppers I n the a r e a , and I f he a l r e a d y has an e x t e n s i v e a d v e r t i s i n g program, then he w i l l l i k e l y p l a y a s i g n i f i c a n t r o l e i n drawing b e t t e r market acceptance of 0.  customers t o t h i s c e n t r e , and w i l l have  which improves the new  centre's p r o b a b i l i t y  success. Tenant M i x A balanced  t e n a n t mix means t h a t t h e r e i s an I d e a l group 66  o f d i f f e r e n t t y p e s o f s t o r e s i n the shopping mix i s Important  f o r two r e a s o n s .  centre.  The  tenant  F i r s t , the success o f the  c e n t r e depends g r e a t l y on the shopper b e i n g a b l e to f i n d  the  v a r i e t y o f Items t h a t he r e q u i r e s I n a one-stop shopping e x p e d i t i o n . T h e r e f o r e t h e r e i s a g r e a t advantage t o h a v i n g as many types  and  l i n e s of merchandise as p o s s i b l e a v a i l a b l e to t h a t shopper. S e c o n d l y , the v a r i e t y of merchandise and t e n a n t s i n a c e n t r e must be b a l a n c e d and  so t h a t t h e r e i s not an e x c e s s i v e d u p l i c a t i o n o f goods  services. I n t e r v i e w s w i t h consumers i n the t r a d e a r e a are i n -  v a l u a b l e i n d e t e r m i n i n g t h e i r a t t i t u d e s towards v a r i o u s t y p e s o f  L. Smith, and V. Gruen, "How t o P l a n S u c c e s s f u l Shopping C e n t r e s , " A r c h i t e c t u r a l Forum, March, 1954, p. 145.  103 goods and where t h e y shop f o r them.  I f i t appears t h a t good  f a c i l i t i e s a r e l a c k i n g f o r c e r t a i n q u a l i t y and p r i c e ranges i n women's c l o t h i n g o r f u r n i t u r e and a p p l i a n c e s f o r example (as e v i d e n c e d by t h e l a r g e p e r c e n t a g e o f shoppers l e a v i n g t h e a r e a t o shop elsewhere f o r t h e s e i t e m s ) t h e n t h e survey p o i n t s o u t t e n a n t t y p e p o t e n t i a l s and produces i n f o r m a t i o n which can be i n v a l u a b l e i n p l a n n i n g t e n a n c i e s , merchandise m i x , q u a l i t y range, p r i c e r a n g e , and b r e a d t h o f s e l e c t i o n , a l l o f which have a d i r e c t i n f l u e n c e on t h e c e n t r e ' s a t t r a c t i v e power. Merchandise M i x Merchants have r e c o g n i z e d d i f f e r e n c e s between consumers shopping I n downtown and suburban c e n t r e s t o r e s .  Families i n the  suburbs a r e t y p i c a l l y home-owning, h o m e - e n t e r t a i n i n g , c h i l d r a i s i n g , i n f o r m a l , and y o u t h f u l consumers.  They need s p o r t s w e a r  and c a s u a l c l o t h i n g , c h i l d r e n ' s wear, home f u r n i s h i n g s , a p p l i a n c e s , and household convenience i t e m s . the  suburbs.  These items a r e more i n demand i n  The suburban consumers t y p i c a l l y a r e from  different  income c l a s s e s , have d i f f e r e n t t a s t e s , and r e q u i r e d i f f e r e n t merc h a n d i s i n g p o l i c i e s i f t h e i r p a t r o n a g e i s t o be c a p t u r e d .  They  w i l l be a t t r a c t e d t o t h e r e t a i l o u t l e t s w h i c h t a i l o r t h e i r merchand i s e s e l e c t i o n t o t h i s market. to  Obviously then the centre's a b i l i t y  a t t r a c t consumer patronage i s dependent  on i t s a b i l i t y t o match  i t s merchandise s e l e c t i o n t o t h e c h a r a c t e r o f t h e market i t wishes to  attract. As mentioned p r e v i o u s l y , t h e g r e a t e r t h e number o f  s e l e c t i o n s o f f e r e d a t a r e t a i l o u t l e t , t h e g r e a t e r i s t h e consumer's e x p e c t a t i o n t h a t h i s shopping t r i p w i l l be s u c c e s s f u l .  Consequently  i t might be expected t h a t consumers w i l l show a w i l l i n g n e s s t o  104 t r a v e l g r e a t e r d i s t a n c e s f o r any good o r s e r v i c e offerings  increase at a p a r t i c u l a r f a c i l i t y .  as t h e number o f  Furthermore,  g r e a t e r t h e b r e a d t h and depth o f s e l e c t i o n I n q u a l i t y , c o l o u r s , s i z e s , and p r i c e s  offered,  the  styles,  t h e more a t t r a c t i v e w i l l be  the r e t a i l f a c i l i t y w h i c h o f f e r s t h i s  selection.  •A. M e r c h a n d i s e M i x and A t t r a c t i v e Power Each t e n a n t i n t h e shopping chandising, stock s e l e c t i o n , p r i c e s  c e n t r e must t a i l o r h i s mer-  and s t y l e s c a r e f u l l y t o t h e  income and b u y i n g h a b i t s o f t h e p e o p l e i n t h e t r a d e a r e a .  He  must know whether these consumers a r e on "champagne budgets" o r "beer budgets."  He must appeal t o the s p e c i f i c c h a r a c t e r o f t h e  market he w i s h e s t o a t t r a c t t h r o u g h m e r c h a n d i s i n g a f f e c t i n g the q u a l i t y , p r i c e , assortment,  policies  and depth o f h i s s e l e c -  tion. Consumers t y p i c a l l y shop l o c a l l y f o r convenience  items;  t h e y p a t r o n i z e h i g h e r - o r d e r c e n t r e s f o r such items as f u r n i t u r e and a p p l i a n c e s where more c h o i c e i n s t y l e , p r i c e , and q u a l i t y a r e n e c e s s a r y ; and they p a t r o n i z e h i g h e s t - o r d e r c e n t r e s f o r c l o t h i n g o r such s t a t u s i t e m s which demand g r e a t c a r e i n s e l e c t i o n .  Price,  q u a l i t y , and s e l e c t i o n v a r y a c c o r d i n g t o Income c l a s s as d e t e r m i n a n t s o f consumer patronage.  H i g h e r income groups may be more  q u a l i t y o r s t y l e c o n s c i o u s and they w i l l tend t o s e a r c h out and p a t r o n i z e those o u t l e t s w h i c h o f f e r e i t h e r a broader s e l e c t i o n i n s t y l e s and q u a l i t i e s o r h i g h e r - p r i c e d , h i g h e r - s t y l e d , b e t t e r q u a l i t y items.  Lower Income c l a s s e s who a r e more r e s t r i c t e d  b u d g e t a r i l y may be more p r i c e  c o n s c i o u s and t h e i r shopping  w i l l r e f l e c t t h e i r more pronounced p r i c e - c o n s c i o u s n e s s .  patronage  A. c e n t r e ' s  105 ability  t o a t t r a c t patronage - w i l l depend on i t s a b i l i t y  i t s merchandising  to adjust  appeal t o match t h e f a c t o r s which m o t i v a t e  con-  sumers i n the t r a d e a r e a . Pricing Policies I t i s n e c e s s a r y t o a c q u i r e d a t a on p r i c e s a c t u a l l y i n f o r c e i n the a r e a , and then a s c e r t a i n what p r i c e s should charged  be  by the t e n a n t s i n the proposed c e n t r e t o be c o m p e t i t i v e  w i t h o t h e r s i n the t r a d e a r e a .  I f they are h i g h e r , t h i s  may  d e t r a c t from the a t t r a c t i o n of t h e c e n t r e , but i f on the o t h e r hand t h e y are c o m p e t i t i v e and c o m p a t i b l e w i t h the c h a r a c t e r o f t h e t r a d e a r e a , t h i s w i l l enhance the shopping  centre's  drawing  power. Image The image which a shopping  c e n t r e p r o j e c t s has  a  d e f i n i t e e f f e c t on the c e n t r e ' s drawing power, a l t h o u g h the effect i s d i f f i c u l t  t o measure.  Two  exact  essentially i d e n t i c a l stores  w i t h e s s e n t i a l l y s i m i l a r market p o t e n t i a l s , but w i t h d i f f e r e n t images, w i l l have d i f f e r e n t b u s i n e s s volumes.  Similarly,  the  share o f the market secured by one c e n t r e i n i t s t r a d e a r e a  can  be c o m p l e t e l y d i f f e r e n t from t h a t of a s i m i l a r type o f c e n t r e o p e r a t i n g w i t h i n an i d e n t i c a l t r a d e a r e a .  T h i s r e f l e c t s the f a c t  t h a t the image o f the c e n t r e can a f f e c t the c e n t r e ' s  drawing  power and market s h a r e . The consumer's image of a c e n t r e i s formed on the b a s i s o f many f a c t o r s , i n c l u d i n g the c e n t r e ' s age, p r o m o t i o n a l programs, merchandise mix, p r i c e s , s e r v i c e s , p e r s o n n e l and p h y s i c a l f a c i l i ties.  The p h y s i c a l c h a r a c t e r i s t i c s of the c e n t r e I n c l u d i n g  106 landscaped  a r e a s , f o u n t a i n s , ponds, s c u l p t u r e ,  advertisement  b o o t h s , r e s t a u r a n t s , benches, I n t e r i o r and  exterior architectural  d e s i g n , l i g h t i n g , modern s t o r e f r o n t s , and  colour a l l increase  enhance the a t t r a c t i v e n e s s of the  and  centre.  When a c e n t r e ' s image I s u n i q u e , and  customers l i k e i t ,  t h e t r a d e a r e a f o r t h a t c e n t r e i s l i k e l y t o extend f a r t h e r market p e n e t r a t i o n I s l i k e l y t o be more I n t e n s e .  and  I f many s t o r e s  i n the c e n t r e d e v e l o p an image w h i c h i s unique and p l e a s i n g t o t h e customers, the e n t i r e c e n t r e w i l l b e n e f i t from the r e s u l t i n g Increments t o a t t r a c t i v e power. Parking S i n c e the o u t s t a n d i n g c h a r a c t e r i s t i c of the shopping c e n t r e i s the a v a i l a b i l i t y of f r e e p a r k i n g , i t i s a p p r o p r i a t e t h a t the p a r k i n g r e q u i r e m e n t s be s t u d i e d as p a r t of the p r o c e s s a n a l y z i n g the c e n t r e .  The need f o r p a r k i n g i s w e l l  of  recognized,  p a r t l y because p a r k i n g spaces are a v i s i b l e t a n g i b l e a s s e t of the f a c i l i t y , but m a i n l y because the consumer o f t e n equates good p a r k i n g w i t h ease of a c c e s s i b i l i t y by A.  Adequacy of P a r k i n g  automobile.  Facilities  The main c o n s i d e r a t i o n i n d e t e r m i n i n g p a r k i n g t o be p r o v i d e d  the amount of  should be t h a t the p a r k i n g f a c i l i t i e s  adequate t o h a n d l e the peak l o a d of any average week.  be  Without  t h i s c a p a c i t y , the c e n t r e w i l l s u f f e r a l o s s of p a t r o n a g e as consumers w i l l f i n d i t too d i f f i c u l t t o g e t n e a r the c e n t r e i n these  Nelson, op. c i t . , p.  252.  107 peak volume p e r i o d s .  On the other hand, sometimes t h e r e i s a d i s -  advantage i n h a v i n g too much p a r k i n g s i n c e a l a r g e bare p a r k i n g l o t 68  makes the shopping  c e n t r e l o o k u n s u c c e s s f u l and u n a t t r a c t i v e .  G e n e r a l l y s p e a k i n g though, up t o a p o i n t , each a d d i t i o n a l p a r k i n g space can c o n t r i b u t e t o more s a l e s f o r the c e n t r e .  I f the  centre  can h a n d l e a d d i t i o n a l b u s i n e s s , and t h e r e i s n o t enough p a r k i n g to h a n d l e t h a t b u s i n e s s , then the p r o v i s i o n of a d d i t i o n a l p a r k i n g space would i n c r e a s e the s a l e s volume o f the c e n t r e . t h e n , adequate p a r k i n g f a c i l i t i e s  Obviously,  are a b s o l u t e l y n e c e s s a r y  c e n t r e i s t o a t t a i n i t s maximum p o t e n t i a l s a l e s .  The  c e n t r e d e v e l o p e r , t h e n , would be w i s e i n p r o v i d i n g an for  expansion  i f the  shopping allowance  i n p a r k i n g f a c i l i t i e s , i n case i t becomes  obvious  a f t e r opening t h a t i n i t i a l p a r k i n g p r o v i s i o n s were inadequate  and  were h i n d e r i n g the c e n t r e ' s a b i l i t y t o a c h i e v e i t s maximum potential. The p a r k i n g r e q u i r e m e n t s  f o r the c e n t r e can o n l y be  a s c e r t a i n e d a f t e r a n a l y z i n g the f o l l o w i n g f a c t o r s :  the s i z e of  the c e n t r e , the t y p e s of t e n a n t s , and the merchandise o f f e r e d ; the s i z e o f the t r a d e a r e a ; the I n c i d e n c e of c a r ownership; the e x t e n t to which patronage depends on the m o t o r i z e d (and the e x t e n t t o which inadequate  and  shopper  p u b l i c t r a n s p o r t a t i o n coverage  o f the t r a d e a r e a n e c e s s i t a t e s a u t o m o t i v e t r a n s p o r t ) . 69 P a r k i n g l o t s should be s p e c i f i c a l l y d e s i g n e d . are more advantageously  p l a c e d i f they are i n f r o n t of the  They centre  or v i s i b l e from the main approach a r t e r i e s where shoppers can I b i d . , p.  253.  I b i d . , p.  258.  see  108 70 t h a t they a r e a c c e s s i b l e .  Entrance  and e x i t from t h e l o t and  ease o f c i r c u l a t i o n w i t h i n i t a r e as i m p o r t a n t size.  as an adequate  Shoppers s h o u l d n o t have t o walk g r e a t d i s t a n c e s from  their  cars to the nearest s t o r e .  I l l o f these c o n s i d e r a t i o n s can be i n -  v a l u a b l e a i d s to maximizing  the s a l e s p o t e n t i a l f o r the centre,  s i n c e they p r o v i d e g r e a t e r convenience t o t h e shopper and t h e r e b y reduce t h e f r i c t i o n  o r c o s t s o f making t h a t shopping  trip  which  i n t u r n makes t h e centre a more a t t r a c t i v e p l a c e t o v i s i t . Amenities To be a s u c c e s s f u l v e n t u r e f o r t h e d e v e l o p e r and t o produce t h e h i g h e s t b u s i n e s s volume f o r t h e t e n a n t s , a c e n t r e s h o u l d be designed with free parking.  shopping  t o be more than j u s t a group o f s t o r e s  I t i s extremely  difficult  t o a l t e r t h e normal  c i r c u l a t i o n p a t t e r n s o f consumers, and t h e o p p o r t u n i t y to p a r k w i l l not accomplish  t h i s alone.  There should be i n a d d i t i o n a  number o f a m e n i t i e s which c r e a t e more p l e a s a n t and d e s i r a b l e surroundings. R e s t a u r a n t s , p l a c e s t o s i t down, p l a y areas f o r c h i l d r e n , r e s t rooms, b r i g h t and c o l o u r f u l new s t o r e f r o n t s , p l a n t i n g and f o u n t a i n s , and music a r e a l l designed t o make t h e 71 c e n t r e a more c o n v e n i e n t , p l e a s a n t p l a c e t o shop. S p e c i a l a t t e n t i o n i n t h e p l a n n i n g s t a g e s can be g i v e n to  d e t a i l s w h i c h would tend t o make t h e c e n t r e a p l a c e which  s e r v e s t h e community, a market p l a c e t o which people w i l l not o n l y f o r shopping, I b i d . , p. 253. I b i d . , p. 247.  come  but f o r s o c i a l and r e c r e a t i o n a l a c t i v i t i e s  109  as w e l l .  W i t h the i n c o r p o r a t i o n of community f a c i l i t i e s ,  c e n t r e p l a y s more than a s t r i c t o f f e r s more i n the way  the  economic r o l e , and i n t h i s  of a t t r a c t i o n s .  way  A u d i t o r i u m s are some-  t i m e s i n c l u d e d t o s t r e n g t h e n the i d e n t i t y w i t h the community and community r e l a t i o n s .  Skating r i n k s , howling a l l e y s , t h e a t r e s ,  and l a r g e covered m a l l s s u i t a b l e f o r l a r g e p u b l i c g a t h e r i n g s are common.  Such f a c i l i t i e s  often f a c i l i t a t e  p r o m o t i o n a l programs,  b a z a a r s , and s p e c i a l events which do much t o enhance the a t t r a c t i v e power o f the c e n t r e . ter  The c e n t r e assumes some o f the  charac-  of the o l d - s t y l e market p l a c e s i n the sense t h a t i t o f f e r s  i n t e r e s t i n g d i v e r s i o n s . Such a m e n i t i e s have an amazing Impact on consumers as f a r as the image o f the c e n t r e i s concerned, i n c r e a s e i t s a t t r a c t i v e n e s s and a t t r a c t i v e power. a t t r a c t i v e power, the more l i k e l y  and  The g r e a t e r the  the c e n t r e w i l l do more b u s i n e s s ,  and i f the a m e n i t i e s h e l p t o i n c r e a s e t h a t a t t r a c t i v e power they are u s u a l l y worth f a r more than t h e i r c o s t . Hours of B u s i n e s s The h o u r s o f b u s i n e s s adopted by a c e n t r e can have a s i g n i f i c a n t e f f e c t on the drawing power of t h a t c e n t r e . be r e a l i z e d t h a t today more and more women a r e working  I t must a f t e r they  are m a r r i e d , and i n many cases they can o n l y shop i n the  evenings  o r on weekends.  I f a s t o r e w i s h e s to remain c o m p e t i t i v e w i t h  o t h e r s t o r e s who  o f f e r evening o r weekend h o u r s , i t must a l s o  o f f e r those h o u r s o r the l i k e l i h o o d i n c r e a s e s t h a t i t w i l l  not  r e a l i z e the f u l l s a l e s p o t e n t i a l a v a i l a b l e to i t . An i m p o r t a n t c h a r a c t e r i s t i c o f r e t a i l i n g i s the convenience  i n shopping.  time  S t o r e s must a s c e r t a i n the h o u r s of the  day o r week when i t w i l l be c o n v e n i e n t f o r t h e i r customers t o  buy  110 the  goods and s e r v i c e s t h e y want.  I t i s usually  advantageous  for  t h e shopping c e n t r e t e n a n t s to c a r e f u l l y c o n s i d e r what h o u r s  they w i l l remain open f o r b u s i n e s s , a d e c i s i o n which w i l l  depend  on many f a c t o r s i n c l u d i n g the t y p e s o f merchandise o f f e r e d , the economic and s o c i a l c l a s s e s of t h e c l i e n t e l e , and the c h a r a c t e r of  the l o c a t i o n .  Each t e n a n t w i l l make h i s own d e c i s i o n hut i t  i s t o t h e i r advantage t o c o l l a b o r a t e on the d e c i s i o n so t h a t the c e n t r e , as a whole, can o f f e r s e r v i c e s over s p e c i f i e d periods. the  daily  T y p i c a l l y , when the department s t o r e s are open so are  other stores. R e s t r i c t e d shopping h o u r s can i n many i n s t a n c e s r e s t r i c t  p a t r o n a g e i f the f a m i l y c a r i s n o t a v a i l a b l e d u r i n g t h o s e h o u r s 72 for  shopping t r i p s .  More and more shoppers are demanding  e v e n i n g h o u r s due t o t h e f a c t more consumers shop i n t h e e v e n i n g or a f t e r work. for  o n l y have time t o  I n North A m e r i c a , the p r e f e r e n c e  e v e n i n g shopping h o u r s i s i l l u s t r a t e d by the f o l l o w i n g s u r v e y  findings:  "the d u r a t i o n o f the s t a y was 51 minutes as compared  w i t h 29 minutes d u r i n g t h e day; 31$ o f a l l shopping t r i p s were made a f t e r 6:00 p.m.;  i n community c e n t r e s , up t o 60% o f a l l t r a d e 73  was done a f t e r 6:00 p.m.;  and i n r e g i o n a l c e n t r e s up t o  40$."^  The p e r c e n t a g e o f t r a d e done on each day o f the week i s h i g h e s t on Thursday, F r i d a y and Saturday owing t o two f a c t o r s , t h e f i r s t b e i n g the l o n g e r hours n o r m a l l y p r o v i d e d on those t h r e e d a y s , and s e c o n d l y , the t r a d i t i o n a l shopping p a t t e r n which emphasizes  end-  of-week s h o p p i n g . Evening h o u r s can c r e a t e some s h i f t problems 72 J o n e s , op. c i t . , p. 54. 73 Donald 1. C u r t i s s , O p e r a t i o n Shopping C e n t r e s , Urban Land I n s t i t u t e , Washington, D. C , 1961, pp. o and l b b .  Ill  for  the v a r i o u s t e n a n t s o f the shopping  c e n t r e but i f they do  not  open i n the e v e n i n g , they run the r i s k o f l o s i n g b u s i n e s s to o t h e r r e t a i l e r s who  do remain open.  Obviously then, convenient  shopping hours can have a  s i g n i f i c a n t b e a r i n g on the a b i l i t y of the c e n t r e to a t t r a c t i t s f u l l potential  patronage. Advertising  That c o n s i d e r a b l e b e n e f i t s can accrue from an  effective,  p o w e r f u l a d v e r t i s i n g and p r o m o t i o n a l program i s w e l l r e c o g n i z e d a l t h o u g h i t i s a d i f f i c u l t problem t o measure the b e n e f i t s quantitatively. The t y p e s o f customer a p p e a l s used i n the c e n t r e ' s a d v e r t i s i n g program are n o r m a l l y geared t h e t r a d e a r e a and the c e n t r e I t s e l f . o r s e r v i c e may  t o the c h a r a c t e r of both Price, quality, variety,  be s t r e s s e d i n media a d v e r t i s i n g through magazines,  t r a d e j o u r n a l s , newspapers, d i r e c t m a i l , r a d i o , and S p e c i a l events, bazaars, h o l i d a y promotions, m o t i o n s a r e common c e n t r e - w i d e  events,  television.  and s e a s o n a l  i l l such a p p e a l s  proattempt  to a t t r a c t more consumers t o the c e n t r e . S i n c e the p o t e n t i a l s a l e s volume e s t i m a t e f o r the c e n t r e i s dependent on the a t t r a c t i v e power o f the c e n t r e , and s i n c e the a t t r a c t i v e power can be i n c r e a s e d w i t h an e f f e c t i v e  advertising  program, a c e r t a i n e f f e c t i v e n e s s i n a d v e r t i s i n g must be assumed when gauging  the new  c e n t r e ' s a t t r a c t i v e power w h i c h w i l l i n t u r n  become a key d e t e r m i n a n t estimate.  i n the d e r i v a t i o n o f the s a l e s volume  112 Summary of In t h i s chapter, and  Factors  the i n t e n t i o n has been t o enumerate  examine the v a r i o u s arguments, a s s u m p t i o n s , c o n c e p t s ,  and  r e l a t i o n s h i p s thought to be v a l i d I n a d i s c u s s i o n of the f a c t o r s which i n f l u e n c e consumer p a t r o n a g e b e h a v i o u r .  The m a t e r i a l  de-  v e l o p e d h e r e w i l l be r e f e r r e d t o t h r o u g h o u t the remainder of t h i s t h e s i s , and was  p r e s e n t e d w i t h the i n t e n t i o n of s p e c i f y i n g the  " b u i l d i n g b l o c k s " which a n a l y s t s and model b u i l d e r s should s i d e r as "raw m a t e r i a l s " when d e v e l o p i n g  con-  p r o c e d u r e s and models t o  a i d i n the p r o c e s s o f s a l e s volume e s t i m a t i n g . I n v i e w of the l e n g t h of t h i s c h a p t e r and  the  involved  d i s c u s s i o n on a g r e a t v a r i e t y of s e p a r a t e t o p i c s , and f o r t h e of c l a r i t y , the main p o i n t s have been e x t r a c t e d and  sake  briefly  summarized below. A.  General  Considerations  There are a number of r e g i o n a l and  demographic f a c t o r s  which a f f e c t the s a l e s p o t e n t i a l a v a i l a b l e to a new  centre.  would i n c l u d e : 1.  Economic o u t l o o k  - the h e a l t h and  growth  of t h e r e g i o n a l economy. 2.  P o p u l a t i o n - the number, d i s t r i b u t i o n ,  composi-  t i o n , d e n s i t y , growth p a t t e r n , Income, e x p e n d i t u r e s , and b u y i n g h a b i t s of the 3.  population.  Income l e v e l s - t h e y a f f e c t the p e r c e n t a g e of income spent f o r v a r i o u s p r o d u c t s of a l l t y p e s . The  expenditure patterns  of consumers v a r y  These  113 w i t h t h e i r income l e v e l , which d i r e c t l y a f f e c t s expenditures f o r d i f f e r e n t  product  classes. 4.  Employment - the c h a r a c t e r of employment i n the r e g i o n a f f e c t s p u r c h a s i n g power, spending p a t t e r n s , shopping h a b i t s , and merchandise  B.  requirements.  Resistance Factors Of the f a c t o r s and i n f l u e n c e s which a f f e c t consumer  s p a t i a l b e h a v i o u r , some tend to i n h i b i t consumer p a t r o n a g e .  Such  f a c t o r s can be d e s c r i b e d as r e s i s t a n c e f a c t o r s . D i s t a n c e t a k e s t i m e , c o s t s money, and r e t a r d s t r a d e movements.  Any  making a t r i p  c i r c u m s t a n c e s which w i l l i n c r e a s e the c o s t s of  ( c o s t s i n the sense o f t i m e , e f f o r t , money, i n -  c o n v e n i e n c e ) w i l l l e s s e n the l i k e l i h o o d t h a t a consumer w i l l undert a k e the t r i p .  R e s i s t a n c e tends t o i n c r e a s e as d i s t a n c e i n c r e a s e s  and t r i p f r e q u e n c i e s d e c l i n e . t r i p frequencies increase.  T r i p d i s t a n c e s tend t o be l o w e r  D i s t a n c e i n time u n i t s more a p t l y  r e p r e s e n t s the c o s t s p e r c e i v e d by the consumer i n making the The impact of d i s t a n c e v a r i e s a c c o r d i n g t o : d i s e sought; chandise  as  trip.  the type of merchan-  the s e l e c t i o n , q u a l i t y , p r i c i n g , and depth o f mer-  sought;  the degree of importance  t o the consumer of  c e r t a i n r e q u i r e d goods; the degree o f s e l e c t i v i t y i n the purchase d e c i s i o n ; the s o c i a l s i g n i f i c a n c e a t t a c h e d t o c e r t a i n  shopping  r e q u i r e m e n t s ; p s y c h o l o g i c a l b l o c k s caused by v a r i o u s g e o g r a p h i c a l b a r r i e r s ; and consumer w i l l i n g n e s s to s u b s t i t u t e o t h e r merchandise. A c c e s s i b i l i t y , t r a f f i c c o n g e s t i o n , and road c a p a c i t i e s can the e f f e c t o f d i s t a n c e .  alter  114 The number o f c o m p e t i t o r s , t h e i r m e r c h a n d i s i n g  policies,  s i z e , age, q u a l i t y and e f f e c t i v e n e s s , a t t r a c t i v e n e s s , and p a r k i n g f a c i l i t i e s a l l a f f e c t t h e p a t r o n a g e and s a l e s volume which a proposed c e n t r e can expect t o c a p t u r e . C.  A t t r a c t i o n Factors The a t t r a c t i v e power o f t h e c e n t r e v a r i e s a c c o r d i n g t o :  the e x t e n t t o which merchandise o f f e r i n g s match t h e c h a r a c t e r o f the t r a d e a r e a and the demands o f t h e consumers; s t o r e s i z e s and the o v e r a l l s i z e o f t h e c e n t r e ; a t t r a c t i v e d e s i g n and l a y o u t ; t e n a n t - t y p e s ; merchandise m i x , b r e a d t h o f s e l e c t i o n , range o f c o l o u r s , s i z e s , and s t y l e s ; c o m p e t i t i v e and m a r k e t - o r i e n t e d p r i c i n g p o l i c i e s ; r e p u t a t i o n o f t h e c e n t r e ; t h e p r o j e c t e d image o f the c e n t r e ; adequacy o f p a r k i n g f a c i l i t i e s ; a m e n i t i e s ; h o u r s o f b u s i n e s s ; and p r o m o t i o n a l  effectiveness.  The a t t r a c t i v e power  o f t h e c e n t r e v a r i e s w i t h t h e above f a c t o r s , b u t the importance and  e f f e c t o f each v a r i e s i n t u r n a c c o r d i n g t o the f a m i l y s i z e ,  age g r o u p i n g s , income s t a t u s , and s o c i a l s t a t u s o f t h e consumers i n the area. ( A l t h o u g h i t has n o t been e x p l i c i t l y s t a t e d , i t s h o u l d be apparent t h a t many o f the above c o n s i d e r a t i o n s a r e a s p e c t s o f e f f e c t i v e shopping  c e n t r e management.  I t should t h e r e f o r e be  e v i d e n t t h a t t h e a t t r a c t i v e power o f t h e c e n t r e can be enhanced w i t h good management.)  -PART B  TECHNIQUES. IN LOCATION ANALYSIS  CHAPTER V METHODS FOR DETERMINING TRADE AREA POTENTIAL Introduction I t I s one t h i n g t o u n d e r s t a n d what a t r a d i n g a r e a i s and what f a c t o r s a r e i m p o r t a n t i n t h e measurement o f t h a t  trade  a r e a , h u t i t i s q u i t e a n o t h e r m a t t e r to a p p l y t h i s knowledge i n the case o f a c e n t r e y e t t o he b u i l t .  Having r e v i e w e d t h e b a s i c  c o n c e p t u a l f a c t o r s and i n t e r r e l a t i o n s h i p s which i n f l u e n c e  con-  sumer p a t r o n a g e b e h a v i o u r , t h e t a s k now i s t o examine t h e v a r i o u s p r a c t i s e d methods o f d e f i n i n g t h e p o t e n t i a l t r a d e a r e a and e s t i m a t i n g t h e s a l e s p o t e n t i a l f o r a proposed c e n t r e .  Specifically,  the purpose i s t o determine how a d e q u a t e l y t h e p r e c e d i n g f a c t o r s and  i n t e r r e l a t i o n s h i p s a r e r e c o g n i z e d and q u a n t i f i e d i n t h e  methods, and a l s o t o what e x t e n t t h e s e methods a r e c a p a b l e o f g e n e r a t i n g r e l i a b l e , a c c u r a t e r e s u l t s based on sound, o b j e c t i v e measurements.  W i t h t h i s o b j e c t i v e i n mind, t h e f o l l o w i n g  w i l l b r i e f l y s u r v e y a few o f t h e commonly p r a c t i s e d Generally  discussion  approaches.  s p e a k i n g , t h e methods t o be examined f o l l o w  a s e q u e n t i a l p r o c e d u r e which i n c l u d e s :  the establishment i n  advance o f a t e n t a t i v e t r a d i n g a r e a f o r a n a l y s i s ; t h e assumption o f a t e n t a t i v e c o n c e p t u a l image o f t h e proposed shopping c e n t r e f o r the purpose o f e s t i m a t i n g #  t h e a t t r a c t i v e power o f t h e e n v i s a g e d  f a c i l i t i e s ; t h e d e t e r m i n a t i o n of t h e t o t a l d i s p o s a b l e the r e s i d e n t s o f the area through p o p u l a t i o n  income o f  s t u d i e s * income  a n a l y s i s , and consumer e x p e n d i t u r e s t u d i e s ; an a n a l y s i s o f comp e t i t i v e drawing power; t h e study o f consumer movements, h a b i t s , a t t i t u d e s , and c h a r a c t e r i s t i c s t o determine t h e l i k e l i h o o d o f  116 p a t r o n a g e from v a r i o u s p a r t s o f t h e t r a d e a r e a ; and t h e r e l a t i o n o f t h e f i n d i n g s t o t h e s u b j e c t s i t e , c u l m i n a t i n g i n an e s t i m a t e o f t h e s a l e s volume p o t e n t i a l f o r t h e proposed c e n t r e .  1  Market Share Method As p r e v i o u s l y d i s c u s s e d i n Chapter I I I , t h e f i r s t i n t h e r e s e a r c h program n e c e s s i t a t e s s e t t i n g up a l i k e l y  step  hypothesis  ( o r a range o f h y p o t h e s e s ) as t o t h e most l i k e l y s i z e and c h a r a c t e r o f t h e proposed f a c i l i t i e s i n o r d e r t o e s t i m a t e t h e a t t r a c t i v e power o f those h y p o t h e s i z e d f a c i l i t i e s .  This i s necessary  before  the t r a d i n g a r e a can be d e l i n e a t e d , s i n c e t h e boundary o f a c e n t r e ' s a r e a o f i n f l u e n c e ( t r a d e a r e a boundary) depends on t h e s i z e and c h a r a c t e r o f t h e f a c i l i t i e s and t h e i r a b i l i t y t o a t t r a c t  patronage.  I f subsequent r e s e a r c h i n d i c a t e s t h a t t h e i n i t i a l assumption as t o t h e s i z e o f t h e envisaged  f a c i l i t i e s was i n c o r r e c t , then t h e  a n a l y s t i s supposed t o a d j u s t h i s i n i t i a l  assumption.  He b e g i n s  by " g u e s s i n g " what s i z e and type o f c e n t r e w i l l be s u c c e s s f u l , a n a l y z e s t h e p o t e n t i a l f o r t h a t s i z e , and i f n e c e s s a r y a l t e r s h i s i n i t i a l guess s u c c e s s i v e l y u n t i l t h e optimum s i z e i s d i s c o v e r e d . However, a f t e r h a v i n g made t h i s i n i t i a l assumption,  t h e problem  I s t o d e f i n e t h e l i m i t s o f t h e t r a d e area i n accordance w i t h t h e h y p o t h e s i z e d a t t r a c t i v e power o f t h e h y p o t h e s i z e d f a c i l i t i e s .  It  i s a t t h i s stage t h a t s u b j e c t i v e judgment e n t e r s i n t o t h e d e c i s i o n . I n most cases t h e a n a l y s t u s i n g t h i s method must a r b i t r a r i l y  decide  2 on a boundary f o r t h e t r a d e a r e a .  U s u a l l y t h e p r a c t i s e i s t o draw  K e l s o n , op. c i t . , pp. 183 - 232 d i s c u s s e s many o f t h e t r a d i t i o n a l methods o f s a l e s volume e s t i m a t i n g and d e s c r i b e s t h e above sequent i a l procedure a t some l e n g t h . 1  2  I b i d . , pp. 188 - 90.  117 on a map s e v e r a l d r i v i n g - t i m e i s o p l e t h s which r a d i a t e out from t h e s u b j e c t s i t e , and then a r b i t r a r i l y d e c i d e which d r i v i n g - t i m e i s o p l e t h i s l i k e l y t o r e p r e s e n t t h e maximum d i s t a n c e consumers w i l l be w i l l i n g t o t r a v e l t o t h e c e n t r e .  Seldom i s t h e r e any p a r t i c u l a r  j u s t i f i c a t i o n g i v e n f o r the c h o i c e o f any p a r t i c u l a r d r i v i n g - t i m e d i s t a n c e , except t h a t t h e c h o i c e i s supposedly  based on " e x p e r i e n c e "  and i n t u i t i o n as t o t h e maximum d i s t a n c e w i t h i n which consumers w i l l be a t t r a c t e d t o t h e c e n t r e g i v e n a c e r t a i n h y p o t h e s i z e d  attractive  power o f t h e s u b j e c t s i t e (not q u a n t i f i e d ) and g i v e n t h e p r e s e n c e o f o t h e r competing f a c i l i t i e s  (also not q u a n t i f i e d ) .  These  e s t i m a t e s o f t h e maximum d r i v i n g - t i m e can v a r y w i d e l y , f o r example from t e n minutes t o over an hour depending on t h e l o c a t i o n , a range which r a i s e s t h e s u s p i c i o n t h a t t h e c h o i c e o f any one p a r t i c u l a r time i s open t o c o n s i d e r a b l e q u e s t i o n . Is  I n any case, t h e t r a d e  area  s u b j e c t i v e l y and a r b i t r a r i l y d e l i m i t e d a c c o r d i n g t o such a p r o -  cedure i n c o n j u n c t i o n w i t h o t h e r f a c t o r s such as g e o g r a p h i c a l b a r r i e r s , p r o x i m i t y of competing c e n t r e s , and l o c a l factors.  accessibility  G e n e r a l l y speaking t h e a n a l y s t s e t s t h e l i m i t s o f t h e  t r a d e a r e a a t a p o i n t beyond which he f e e l s the b u s i n e s s volume 3  coming t o t h e c e n t r e w i l l be i n s i g n i f i c a n t o r immeasurable. Supposedly, i f i n subsequent f i e l d work, t h e a n a l y s t d e c i d e s he has made a m i s t a k e  and t h e t r a d e a r e a boundary should be f a r t h e r  out from t h e c e n t r e ( n o r m a l l y as a r e s u l t o f p e r s o n a l i n t e r v i e w s which i n d i c a t e t h a t consumers beyond t h e i n i t i a l l y assumed boundary would indeed be i n t e r e s t e d i n p a t r o n i z i n g t h e c e n t r e ) t h e a n a l y s t s i m p l y r e s e t s t h e boundary f a r t h e r away. a n a l y t i c a l procedure, Ibid.  Regardless  of the  and e s p e c i a l l y i f comprehensive e x t e n s i v e  118 p e r s o n a l I n t e r v i e w s a r e n o t conducted, i t i s d i f f i c u l t t o p l a c e much c o n f i d e n c e i n a t r a d e a r e a boundary determined i n such an a r b i t r a r y manner. procedure, Step 1 )  N e v e r t h e l e s s , t h i s i s t h e f i r s t step i n t h e 4 t h e b a s i c s o f which a r e o u t l i n e d below:  D e f i n e t h e t r a d e a r e a by s u b j e c t i v e l y e s t i m a t i n g t h e drawing power o f t h e h y p o t h e s i z e d  f a c i l i t i e s (by  g u e s s i n g t h e a t t r a c t i v e power o f t h e c e n t r e and g u e s s i n g t h e d i s t a n c e i n p h y s i c a l o r time u n i t s t h a t consumers w i l l be w i l l i n g t o t r a v e l i n r e s p o n s e t o t h a t a t t r a c t i v e power, as d i s c u s s e d a b o v e ) . Step 2)  The t r a d e a r e a i s s u b d i v i d e d i n t o census d i s t r i c t s o r s m a l l e r s u b d i v i s i o n s depending on t h e amount o f d e t a i l d e s i r e d and t h e budgeted r e s e a r c h expense, o r a c c o r d i n g to v a r i o u s g e o g r a p h i c tics.  and s o c i a l economic c h a r a c t e r i s -  The s i z e , growth, and q u a l i t y o f t h e t r a d e a r e a  a r e a n a l y z e d a l o n g w i t h p o p u l a t i o n growth, income l e v e l s , and t h e a r e a ' s g e n e r a l s t a t e o f economic h e a l t h . Step 3)  The p o p u l a t i o n i n each segment o f t h e t r a d e a r e a i s 6 d e t e r m i n e d as a c c u r a t e l y as p o s s i b l e .  Depending on t h e  y e a r f o r which s a l e s volumes p r o j e c t i o n s a r e b e i n g made, f u t u r e changes i n p o p u l a t i o n a r e p r o j e c t e d on t h e b a s i s of employment t r e n d s , n a t u r a l i n c r e a s e s o r v o l u n t a r y m i g r a t i o n , and p u b l i c p o l i c y on p l a n n i n g and h o u s i n g generally. Jones, op. c l t . , pp. 66 - 68. 5 6  N e l s o n , op. c l t . , p. 1 9 1 . I b i d . , p. 197.  119 I n t e r v i e w s a r e o f t e n conducted throughout the t r a d e area to determine:  a) a t t i t u d e s toward e x i s t i n g and  proposed f a c i l i t i e s i n terms o f s a t i s f a c t i o n , b) shopping h a b i t s and p a t t e r n s o f p a t r o n a g e , c) a t t i t u d e s  towards  p r i c i n g and merchandise s e l e c t i o n , o r what I s demanded i n t h i s a r e a , and d) s o c i o - e c o n o m i c f a c t o r s such as employment s t a t u s , income s t a t u s , s o c i a l s t a t u s , f a m i l y 7  s i z e , and age g r o u p s . A c c e s s i b i l i t y s t u d i e s a r e conducted t o a s c e r t a i n : a) t i m e - d i s t a n c e from the proposed s i t e t o each s e c t i o n of  t h e t r a d e a r e a , b) road networks and t h e i r  traffic  c a p a c i t y , c) automobile i n c i d e n c e and the adequacy o f p u b l i c t r a n s p o r t f a c i l i t i e s , d) the l o c a t i o n o f each spending u n i t I n r e l a t i o n to e x i s t i n g r e t a i l  facilities  and the proposed c e n t r e , and e) the ease o f t r a v e l to g  e x i s t i n g r e t a i l f a c i l i t i e s and the proposed Existing retail  f a c i l i t i e s must be a s s e s s e d .  centre. Data on  c o m p e t i t i v e s t o r e s must g e n e r a l l y be g a t h e r e d i n f i e l d studies.  I n f o r m a t i o n may  Include:  l o c a t i o n of the com-  p e t i t i v e f a c i l i t i e s ; t y p e o f l o c a t i o n ( f o r example s i n g l e s t o r e , neighbourhood, community or r e g i o n a l c e n t r e ) ; h i s t o r i c a l d a t a about the s t o r e s ' o r c e n t r e s ' growth r a t e and the a g g r e s s i v e n e s s o f each c o m p e t i t o r ; the  age, q u a l i t y , d e s i g n , c o n d i t i o n , and appearance o f  each s t o r e o r c e n t r e ; square f e e t o f c o m p e t i t i v e pp. 198 - 209. p. 211.  selling  120 area; merchandising  p o l i c i e s i n c l u d i n g the q u a l i t y  variety, p r i c i n g , special l i n e s featured, private b r a n d s , and a d v e r t i s i n g p r a c t i c e s ; s t o r e h o u r s ; ing  facilities;  consumer acceptance o f each  park-  facility;  share o f t h e market c a p t u r e d by each o u t l e t ; and t h e Q  e s t i m a t e o f t h e s a l e s volume a c h i e v e d  by each o u t l e t , ^  a s u b j e c t which p r e s e n t s i t s own s p e c i a l problems i n measurement.  To d i g r e s s f o r a moment, t h i s s u b j e c t i s  b r i e f l y c o n s i d e r e d below b e f o r e t h e d i s c u s s i o n r e t u r n s to  Step 7 i n t h e g e n e r a l  procedure.  Interviews i n the biggest centres are f r e quently h e l p f u l i n e s t a b l i s h i n g the general trade area l i m i t s f o r those c e n t r e s . a competitive f a c i l i t y ,  I n making s a l e s e s t i m a t e s o f  the a n a l y s t o f t e n conducts  customer i n t e r v i e w s t o o b t a i n consumer l o y a l t i e s , p r e f e r e n c e s , i n d i c a t i o n s on p r i c i n g which a r e f a v o u r a b l e to t h a t market and g e n e r a l o p i n i o n s on t h e v a r i o u s comp e t i t i v e o u t l e t s a v a i l a b l e i n the region. The most d i f f i c u l t problem i n e v a l u a t i n g competitive stores i s estimating sales.  The a n a l y s t  has no r e l i a b l e s e t of t o o l s w i t h which t o generate s a l e s e s t i m a t e s , b u t through  s y s t e m a t i c e f f o r t must  attempt t o e s t i m a t e as a c c u r a t e l y as p o s s i b l e .  The  number o f customers p a t r o n i z i n g an o u t l e t p r o v i d e s some i n d i c a t i o n s as t o s a l e s l e v e l s .  The t e c h n i q u e  o f c o u n t i n g customers i s sometimes employed i n o r d e r t o I b i d . , pp. 211 - 213-  121 compare the number of customers w i t h t h a t o f 10  another  s t o r e , the s a l e s o f which are known. I t should be noted t h a t these methods are o f course v e r y s u b j e c t i v e , which i n d i c a t e s the l a c k o f more p r e c i s e l y d e f i n e d q u a n t i t a t i v e t o o l s w i t h which to e v a l u a t e c o m p e t i t i o n .  O b v i o u s l y , the more q u a n t i -  t a t i v e d a t a a v a i l a b l e to the a n a l y s t , the b e t t e r the l i k e l i h o o d t h a t he can produce an a c c u r a t e e s t i m a t e o f the impact of c o m p e t i t i o n . The most common approach i n v o l v e s measuring the square f o o t a g e of s t o r e a r e a , which i s then m u l t i p l i e d by a c o n v e r s i o n i n d e x i n o r d e r t o a r r i v e a t a s a l e s f i g u r e . F o r example, a c o n v e r s i o n i n d e x o f $5.00 p e r square f o o t may be a p p l i e d a g a i n s t the number o f square f e e t o f s e l l i n g a r e a to a r r i v e a t an e s t i m a t e o f s a l e s . C o n v e r s i o n i n d i c e s are u s u a l l y based on t y p i c a l i n d u s t r y p e r f o r m a n c e , o r on the e x p e r i e n c e o f i n d i v i d u a l t e n a n t - t y p e s i n the c e n t r e , o r on s u b j e c t i v e " f e e l " o r i n t u i t i o n . However, whatever the c o n v e r s i o n i n d e x u s e d , the a n a l y s t must a d j u s t the s a l e s r e s u l t t h e r e b y o b t a i n e d t o r e f l e c t o t h e r f a c t o r s such as the s t o r e ' s a s s o c i a t i o n w i t h o t h e r g e n e r a t i v e b u s i n e s s e s n e a r b y , the merchandise o f f e r i n g s , s t o r e age and appearance, and e f f e c t i v e promotional e f f o r t s . The h a z a r d i n the c o n v e r s i o n i n d e x approach i s t h a t f o r i n d i v i d u a l s t o r e s a c o n v e r s i o n i n d e x may be f a r o f f the mark. T h e r e f o r e , a good d e a l o f c a u t i o n s h o u l d be e x e r c i s e d when a p p l y i n g such c o n v e r s i o n i n d i c e s . I n the f i n a l a n a l y s i s , an a c c u r a t e s a l e s e s t i m a t e seems to depend l a r g e l y on the a n a l y s t ' s e x p e r i e n c e , s k i l l , i n g e n u i t y , and judgment. (* See C u r t K o r n b l a u and George L. Baker, "A Guide to E v a l u a t i n g C o m p e t i t i o n , " i n K o r n b l a u , op. c i t . , p. 133.  122 Step 7)  T o t a l d i s p o s a b l e income o f each s e c t i o n o f the t r a d e a r e a i s c a l c u l a t e d e i t h e r by m u l t i p l y i n g p e r c a p i t a income d a t a f o r each s e c t i o n of the t r a d e a r e a by t h a t s e c t i o n ' s p o p u l a t i o n o r by m u l t i p l y i n g average f a m i l y income by the number of f a m i l i e s .  The r e s u l t a n t f i g u r e  i s m u l t i p l i e d by a p e r c e n t a g e f a c t o r t o a r r i v e a t the " d i s p o s a b l e " p o r t i o n o f t h a t income, o r t h a t p o r t i o n a v a i l a b l e f o r r e t a i l e x p e n d i t u r e a f t e r the payment of t a x e s , mortgages, i n s u r a n c e , e t c . Step 8)  R e t a i l e x p e n d i t u r e f a c t o r s (which a r e based on n a t i o n a l averages of the p e r c e n t a g e o f d i s p o s a b l e income  spent  on each type of merchandise) are a p p l i e d to the t o t a l d i s p o s a b l e income t o o b t a i n the p e r c e n t a g e s of t h a t income n o r m a l l y spent on each type of merchandise. are  totalled  These  f o r each s e c t i o n o f the t r a d e a r e a and  i n d i c a t e t h e t o t a l r e t a i l e x p e n d i t u r e p o t e n t i a l o f the t r a d e a r e a f o r the t y p e s of merchandise o f f e r e d i n the proposed f a c i l i t y . Step 9)  W i t h the a i d of s u b j e c t i v e judgment, p e r c e n t a g e f a c t o r s are  a r b i t r a r i l y a s s i g n e d which r e p r e s e n t the t o t a l  volume o f t r a d e i n each a r e a f o r each c l a s s o f merchand i s e which w i l l go t o the proposed centre.^"  1  Sometimes  two p e r c e n t a g e f a c t o r s a r e a p p l i e d , one f o r convenience goods and the o t h e r f o r shopping goods.  N e l s o n , op. c i t . , p. 217.  The summation  123  of  these e s t i m a t e s g i v e s the t o t a l s a l e s volume p r o 12  j e c t i o n f o r the proposed c e n t r e . Step 10)  The e s t i m a t e d s a l e s volume f o r the proposed  centre i s  t r a n s l a t e d i n t o r e q u i r e d s e l l i n g a r e a i n square  feet  by d i v i d i n g the expected annual volume by what i s cons i d e r e d t o be an a c c e p t a b l e s a l e s p e r square f o o t 13 figure.  F o r example, i f i n a g i v e n y e a r s u c c e s s f u l  r e g i o n a l c e n t r e s tend t o r e q u i r e between $50 - $70 p e r square f o o t o f s e l l i n g a r e a t o a c h i e v e s a t i s f a c t o r y volume s t i ma na at le y si ts' ds i viindteudi t by These pp re ro cf ei nt ts a, g ethen f a c tthe o r s annual are based on ethe ive judgment as t o how e f f e c t i v e the proposed c e n t r e w i l l be i n capt u r i n g a share of the p o t e n t i a l market. The a n a l y s t b a s i c a l l y d i s t r i b u t e s the p o t e n t i a l among the v a r i o u s competing o u t l e t s i n c l u d i n g the proposed c e n t r e . S i n c e t h e r e i s r a r e l y ( i f any) j u s t i f i c a t i o n on q u a n t i t a t i v e grounds f o r the c h o i c e of any one p a r t i c u l a r percentage f a c t o r as the e x a c t p r o p o r t i o n o f the p o t e n t i a l e x p e n d i t u r e which the proposed f a c i l i t y w i l l c a p t u r e , the f a c t o r chosen must be viewed w i t h c o n s i d e r a b l e c a u t i o n . I t i s common f o r such a r b i t r a r y market share p e r c e n t a g e f a c t o r s t o be g r o s s l y i n e r r o r as a r e s u l t of i n a d e q u a t e and u n q u a n t i f l e d judgments as to the proposed c e n t r e ' s drawing power. Often these f a c t o r s are chosen w i t h o u t any e x p l a n a t i o n as t o how they were d e r i v e d o r why a p a r t i c u l a r f i g u r e i s more s u i t a b l e than a n o t h e r . A r e s e a r c h r e p o r t which f o r example uses a market share p e r c e n t a g e f a c t o r o f 14.5$ but does n o t mention the j u s t i f i c a t i o n f o r the c h o i c e of such a p r e c i s e f i g u r e can o n l y be viewed w i t h t o t a l d i s trust. The market share o r market p e n e t r a t i o n a c h i e v e d by a c e n t r e i n a p a r t i c u l a r a r e a w i l l depend on t h a t c e n t r e ' s a t t r a c t i v e power and on the f a c t o r s which i n f l u e n c e consumer patronage b e h a v i o u r ( i n f a c t , most o f the f a c t o r s mentioned i n Chapter I V ) . The d i s t a n c e o f an a r e a from the c e n t r e , the appeal o f the s u b j e c t c e n t r e , and t h e r e l a t i v e appeal o f a l l competing f a c i l i t i e s a r e a few of the f a c t o r s which a f f e c t the s u b j e c t c e n t r e ' s t r a d e a r e a p e n e t r a t i o n . A c c u r a t e assessment of the e f f e c t t h a t the new c e n t r e w i l l have on t h e patronage b e h a v i o u r of the t r a d e a r e a customers i s an e x t r e m e l y d i f f i c u l t t a s k and one which demands more p r e c i s e l y d e f i n e d and q u a n t i f i e d t e c h n i q u e s i f the c h o i c e s of market share p e r c e n t a g e f a c t o r s are t o be a c c e p t e d w i t h any measure of c o n f i d e n c e . N e l s o n , op. c i t . , p.  225.  124 a s p e c i f i c f i g u r e i n t h i s range t o produce an e s t i m a t e of  the t o t a l s e l l i n g a r e a r e q u i r e d t o s u c c e s s f u l l y  h a n d l e t h i s a n t i c i p a t e d volume.  S i m i l a r l y , Industry  averages o f the s a l e s p e r square f o o t c o n s i d e r e d necess a r y by each t e n a n t - t y p e f o r s u c c e s s f u l o p e r a t i o n a r e sometimes a p p l i e d t o t h e volume expectancy f o r each t e n a n t - t y p e t o a s c e r t a i n the s e l l i n g a r e a which each t e n a n t - t y p e can s u c c e s s f u l l y occupy i n the new  centre.  A g a i n , t h e r e i s a c o n s i d e r a b l e danger i n a p p l y i n g such averages to any p a r t i c u l a r s i t u a t i o n , and i t s h o u l d be r e c o g n i z e d t h a t the p r o c e d u r e produces  approximate  solutions only. Vacuum C a l c u l a t i o n Method In  t h i s method, p r i m a r y and secondary t r a d e a r e a s are  o u t l i n e d around a s i t e based on a r b i t r a r y p r e - s e l e c t e d  travel  14  time l i m i t a t i o n s and n a t u r a l b a r r i e r s .  Data on p o p u l a t i o n ,  Income, and the t o t a l b u s i n e s s volume a v a i l a b l e i n the t r a d e a r e a are to  developed.  Then a l l the s t o r e s and c e n t r e s w i t h i n o r c l o s e  t h e t r a d e a r e a a r e p h y s i c a l l y measured so t h a t t h e i r volume  c a p a c i t y can be d e t e r m i n e d .  The method f o r d o i n g t h i s i s t o  a s s i g n each competing r e t a i l f a c i l i t y a c e r t a i n s a l e s p e r square f o o t based on n a t i o n a l averages f o r t h a t type of f a c i l i t y t h e n m u l t i p l y t h i s f i g u r e by the square f o o t a g e of each  and  facility  to  determine t h e i r volume c a p a c i t y .  of  the s t o r e s and c e n t r e s w i t h i n or c l o s e t o the t r a d e a r e a are  1 4  I M d . , p. 151.  The d o l l a r volume c a p a c i t y  125 then s u b t r a c t e d from the t o t a l volume a v a i l a b l e i n the a r e a . b a l a n c e or "vacuum" r e p r e s e n t s 15 new  the p o t e n t i a l f o r the proposed  centre. This technique  b a s i c a l l y a t t e m p t s to show which a r e a s  are u n d e r - s e r v e d w i t h r e t a i l f a c i l i t i e s . of t o t a l s a l e s t o each c o m p e t i t i v e  But a s s i g n i n g  proportions  o u t l e t on the b a s i s of normal  o r average s a l e s p e r square f o o t r a t i o s assumes t h a t the facility will  o n l y p i c k up the excess e x p e n d i t u r e  does not p r o p e r l y c o n s i d e r whether the new  new  potential.  render c e r t a i n e x i s t i n g o u t l e t s u n p r o f i t a b l e . e x i s t i n g o u t l e t s w i l l continue proposed f a c i l i t y  out by r e a l i t y .  to a t t r a c t normal volumes a f t e r the  opens, a c o n c l u s i o n which i s not always borne  F u r t h e r m o r e , the method i m p l i e s t h a t the proposed  which t h a t f a c i l i t y w i l l r e c e i v e . the r e s i d u a l e x p e n d i t u r e ,  new  Any  It will  expenditure  supposedly o n l y  receive  r e g a r d l e s s of t h a t a t t r a c t i v e power, o r  f a c t o r s , o r a c c e s s i b i l i t y , o r the convenience of  location.  absurd.  to  I t assumes t h a t the  f a c i l i t y ' s a t t r a c t i v e power has no b e a r i n g on the  time-distance  It  f a c i l i t y will in fact  c a p t u r e a s u f f i c i e n t p r o p o r t i o n of the p o t e n t i a l e x p e n d i t u r e  new  The  T h i s c o n c l u s i o n on l o g i c a l grounds appears to  the  be  s a l e s volume e s t i m a t e based on t h i s approach would have  t o be viewed w i t h c o n s i d e r a b l e  caution.  Analog Method One  way  to determine the t r a d i n g a r e a and  the  sales  volume p o t e n t i a l w i t h i n i t f o r a proposed c e n t r e i s t o know what k i n d of a t r a d i n g a r e a an e x i s t i n g c e n t r e of s i m i l a r s i z e , l o c a t i o n  1  5  J o n e s , op. c i t . , p.  65.  126 t y p e , and o p e r a t i n g c h a r a c t e r i s t i c s commands, p r e f e r a b l y one 16 the same ownership as the proposed c e n t r e .  I f trading  under  area  models of e x i s t i n g c e n t r e s a r e a v a i l a b l e t o the a n a l y s t , the o f d e f i n i n g one  f o r a proposed c e n t r e becomes l e s s  s i n c e the a n a l y s t may  difficult,  be a b l e t o d e l i n e a t e the p o t e n t i a l t r a d i n g  a r e a b o u n d a r i e s w i t h b e t t e r a c c u r a c y t h r o u g h the use o f An a n a l o g  task  analogs.  i s a v i s i b l e e q u i v a l e n t o f an envisaged s i t u a t i o n ,  so by u s i n g a n a l o g i e s the a n a l y s t a p p l i e s knowledge o f  and  existing  s i t u a t i o n s t o undeveloped s i t u a t i o n s t h a t appear to be c l o s e l y similar. An analog i s the q u a n t i f i e d e x p e r i e n c e , o r performance r e c o r d , of an e x i s t i n g r e t a i l f a c i l i t y , i n r e l a t i o n t o known market f a c t o r s , consumer shopping b e h a v i o u r p a t t e r n s , and s t o r e c h a r a c t e r i s t i c s . These a n a l o g s a r e used as bench marks f o r p r e d i c t i n g the s a l e s o f proposed new s t o r e s which are s i m i l a r i n e s s e n t i a l r e s p e c t s t o the a n a l o g sites.!T The v i r t u e o f t h i s p r o j e c t i o n method i s t h a t i t i s based upon q u a n t i f i e d a s p e c t s  o f the t r a d i n g a r e a i n c o m b i n a t i o n  w i t h the known performance of o t h e r s i m i l a r o u t l e t s i n s i m i l a r situations. A n a l o g s do not p r o v i d e a magic f o r m u l a - no two s i t u a t i o n s are e x a c t l y a l i k e , and the a v a i l a b l e a n a l o g s must t h e r e f o r e be i n t e r p r e t e d and tempered by the s t o r e l o c a t i o n a n a l y s t I n the l i g h t o f h i s s u b j e c t i v e judgment . ° 1  ^ Kane, op. c l t . , p. 31. 17 ' W. Applebaum, "The A n a l o g Method f o r E s t i m a t i n g P o t e n t i a l S t o r e S a l e s , " i n K o r n b l a u , op. c l t . , p. 232. Ibid. 1 8  127  T h i s method f o r e s t i m a t i n g p o t e n t i a l s a l e s volumes depends on b o t h q u a n t i f i e d The  less quantified  e x p e r i e n c e and  subjective  judgment.  e x p e r i e n c e a v a i l a b l e , the more i t becomes  n e c e s s a r y t o r e l y on s u b j e c t i v e  judgment.  Quantified  experience  r e f e r s t o r e s u l t s o b t a i n e d from measurements of r e t a i l  sales  in  r e l a t i o n to known market f a c t o r s , consumer p a t r o n a g e b e h a v i o u r , retail f a c i l i t y characteristics. f a c i l i t i e s and f i e d and  Analogous s i t u a t i o n s o f  s i m i l a r market f a c t o r s , when s t a t i s t i c a l l y  and  similar quanti-  r e l a t e d , can become bench-marks f o r r e f e r e n c e when con-  d u c t i n g s a l e s volume a n a l y s e s on new, An  a n a l o g might i n c l u d e  but  similar situations.  the f o l l o w i n g  information:  l o c a t i o n o f the o u t l e t , t y p e o f o u t l e t , s i z e of o u t l e t , annual s a l e s volume, s a l e s p e r  square f o o t , income l e v e l s i n t h a t  a r e a , main method o f t r a n s p o r t a t i o n  used by customers, number o f  customers w i t h i n v a r i o u s t i m e - d i s t a n c e s from the c e n t r e , drawing power o f the c e n t r e w i t h i n c r e a s i n g  s a l e s , t o t a l e x p e n d i t u r e p o t e n t i a l , and  the  d i s t a n c e from  c e n t r e , market p e n e t r a t i o n (market s h a r e ) a c h i e v e d , p e r  and  trade  the q u a n t i t y ,  the  capita  quality,  c o m p e t i t i v e p o s i t i o n of competing o u t l e t s i n terms o f  their  market s h a r e s . ^ 1  The  l o c a t i o n analyst  would t h e n examine t h o s e a n a l o g s  c o l l e c t e d f o r competing f a c i l i t i e s o r s i m i l a r f a c i l i t i e s and  would  s e l e c t those a n a l o g s most c l o s e l y a p p r o x i m a t i n g the f a c t o r s o f new  proposed l o c a t i o n .  case s t u d i e s adjusting  By  a v e r a g i n g the a n a l o g s which are  o f s i m i l a r , a c t u a l s i t u a t i o n s , and  s i t e as compared w i t h the p r e v i o u s ones, the a n a l y s t 1 9  IM-d.. PP.  234  -  240.  actual  then modifying  t h e s e averages t o f i t the v a r i a t i o n s i n the  the  proposed estimates  or  128 the  expected p a t r o n a g e , the expected p e r c a p i t a s a l e s , and the  t o t a l s a l e s volume f o r the s u b j e c t c e n t r e . I n many cases the a n a l o g t e c h n i q u e cannot be used  since  t h e r e a r e e i t h e r no a n a l o g s w i t h which t o compare, o r t h e a n a l o g s are  too d i s s i m i l a r t o p e r m i t a d j u s t m e n t s o f any a c c u r a c y .  i s no t h e o r e t i c a l c o n t e n t t o t h e method: w i t h no attempt t o e x p l a i n . c a u s a t i o n .  There  r e a l i t y i s recorded  T h e r e f o r e , i f the r e a l i t y  d e s c r i b e d i n the a n a l o g i s g r o s s l y d i s s i m i l a r t o t h a t o f the s u b j e c t s i t e , t h e r e i s no t h e o r e t i c a l e x p l a n a t i o n o f how pensate f o r the d i f f e r e n c e s .  T h e r e f o r e t h e method demands t h a t a  c l o s e a p p r o x i m a t i o n o f the s u b j e c t s i t e be a v a i l a b l e . the  t o com-  In f a c t ,  method was advocated as a r e s u l t o f t h e r e c o g n i t i o n t h a t  t h e o r y had n o t y e t developed t o t h e p o i n t where i t c o u l d a c c u r a t e l y q u a n t i f y t h e m y r i a d f a c t o r s i n f l u e n c i n g consumer p a t r o n a g e . T h e r e f o r e , w i t h o u t a t t e m p t i n g t o t h e o r i z e , t h e method m e r e l y a d v o c a t e s comparing a proposed s i t u a t i o n w i t h an e m p i r i c a l l y observed one and a d j u s t i n g t h e a c t u a l , observed s i t u a t i o n t o a c c o u n t f o r t h e d i f f e r e n c e s between i t and t h e proposed  situation.  P r o v i d e d t h e s e d i f f e r e n c e s are n o t too extreme, and p r o v i d e d s u i t a b l e a n a l o g s a r e a v a i l a b l e , and p r o v i d e d s u b j e c t i v e judgments are  a c c u r a t e , t h e method c o u l d p r o v i d e a r e a s o n a b l y a c c u r a t e p r e -  diction.  However, a n a l o g s a r e seldom a v a i l a b l e i n s u f f i c i e n t  d e t a i l , v a r i e t y , o r s u i t a b i l i t y , and c o n s e q u e n t l y a c o n s i d e r a b l e number o f s u b j e c t i v e judgments a r e u s u a l l y n e c e s s a r y which i n creases the p r o b a b i l i t y of e r r o r .  129  Limitations A.  R i g i d S a l e s L e v e l Assumption One c r i t i c i s m o f t h e vacuum c a l c u l a t i o n method i s i t s  a p p a r e n t f a i l u r e to a l l o w f o r t h e i n c r e a s i n g e f f i c i e n c y i n t h e use o f f l o o r space, i n terms o f s a l e s p e r square f o o t .  In other  words, t h e method assumes t h a t t h e v a r i o u s e x i s t i n g c e n t r e s a r e a l r e a d y a t maximum s a l e s and would n o t be a b l e t o h a n d l e i n c r e a s e d s a l e s volumes w i t h o u t expanding f a c i l i t i e s .  I t a l s o assumes t h a t  the new f a c i l i t y w i l l o n l y c a p t u r e t h e r e s i d u a l p o t e n t i a l w h i c h i s supposedly  under-served,  w h i c h i s why t h e method tends t o p r o -  duce a more c o n s e r v a t i v e s a l e s volume e s t i m a t e than t h e market share method, which g e n e r a l l y g i v e s an o p t i m i s t i c assessment o f sales potential.  T h i s i s m a i n l y because t h e market share p e r c e n t a g e  f a c t o r s a s s i g n e d i n t h e market share method f o r t h e drawing power in  each t r a d e a r e a segment n o r m a l l y produce h i g h e r e s t i m a t e s o f  t r a d e c a p t u r e than when t h e e x i s t i n g s a l e s p o t e n t i a l i s a l l o c a t e d to  a l l e x i s t i n g c o m p e t i t o r s f i r s t and o n l y t h e r e s i d u a l  considered  as p o t e n t i a l f o r t h e new c e n t r e . B.  Expensive In  and L e n g t h y t h e market share method, t h e depth o f t h e p r e l i m i n a r y  r e s e a r c h p r o v i d e s u s e f u l i n f o r m a t i o n which can be used i n t h e d e s i g n o f t h e shopping  c e n t r e and i n p l a n n i n g t h e p r o m o t i o n a l  t e c h n i q u e s , b u t t h e l e n g t h o f time and expense r e q u i r e d f o r any r e s e a r c h o f t h i s type i s a d i s a d v a n t a g e  e s p e c i a l l y where  t i o n f o r p o t e n t i a l s i t e s and m a r k e t s i s h i g h . siderable f i e l d expensive  competi-  I t i n v o l v e s con-  surveys and consumer r e s e a r c h s t u d i e s which a r e  and r e q u i r e e x p e r i e n c e d  interviewers, particularly i n  130 the assessment of shopping h a b i t s and p r e f e r e n c e s .  In assessing  the c o m p e t i t i o n , e s t a b l i s h i n g t h e r e l a t i v e e f f i c i e n c y and  attrac-  t i o n o f each competing r e t a i l f a c i l i t y by survey methods even i f o n l y on a sample b a s i s i s l e n g t h y and depends on e f f e c t i v e v i e w i n g and d a t a p r o c e s s i n g . takes l i t t l e  Furthermore,  inter-  o f t e n the a n a l y s i s  account o f such f a c t o r s as i n c r e a s e d c a r  ownership,  o r o f d i f f e r e n t e x p e n d i t u r e p a t t e r n s and shopping h a b i t s i n the v a r i o u s income C.  groups.  N e c e s s i t y f o r S u b j e c t i v e Judgment The number o f assumptions made o f t e n p l a c e s the v a l i d i t y  o f the r e s u l t s i n doubt, and a l s o emphasizes the n e c e s s i t y o f t a i n i n g accurate data.  ob-  The main p r o b l e m , however, o c c u r s i n the  c a l c u l a t i o n o f the t r a d e a r e a l i m i t s and the c o r r e c t market share percentage  factors.  There i s u s u a l l y v e r y l i t t l e  theoretical  J u s t i f i c a t i o n i n the reasons f o r e i t h e r the c h o i c e of a p a r t i c u l a r d r i v i n g - t i m e f o r the t r a d e a r e a boundary, o r the c h o i c e o f market share p e r c e n t a g e s .  The a n a l y s t m e r e l y i n t u i t i v e l y weighs the  v a r i o u s f a c t o r s t o a r r i v e a t a " g u e s s t i m a t e " o f drawing power and market p e n e t r a t i o n .  W h i l e the f i e l d work and o r i g i n a l r e s e a r c h  a r e d i r e c t e d p r i m a r i l y toward i n c r e a s i n g the a c c u r a c y of judgment for  t h e s e e s t i m a t e s , and a l t h o u g h t h e s e e s t i m a t e s are based on  l o c a l c i r c u m s t a n c e s , they are s t i l l  a r b i t r a r y , s u b j e c t i v e Judgments.  E s t i m a t i n g the b u s i n e s s volume f o r a new  outlet Involves  p r e d i c t i n g what i n d i v i d u a l s w i l l do when they a r e o f f e r e d d i f f e r ent a l t e r n a t i v e s from t h o s e they had b e f o r e . d i s c u s s i o n , i t appears t h a t t h e r e i s no way use o f Judgment.  From the p r e c e d i n g o f e l i m i n a t i n g the  The n e c e s s i t y f o r s u b j e c t i v e Judgment a t v a r i o u s  s t a g e s i n these methods r e f l e c t s t h e l a c k o f more p r e c i s e l y  131  defined quantitative t o o l s . D.  Danger o f Cumulative E r r o r s I n u s i n g t h e methods d i s c u s s e d i n t h i s c h a p t e r , t h e  a n a l y s t i s f o r c e d t o make assumptions  e s p e c i a l l y i n the areas o f  market share p e r c e n t a g e s , t r a d e l o s s t o competing r e t a i l  facilities,  market s h a r e s i n t h e event o f new competing o u t l e t s opening and t h e a c t u a l l i m i t s o f t h e t r a d e a r e a .  nearby,  That a danger e x i s t s f o r  making c u m u l a t i v e e r r o r s i s e v i d e n t i n t h e f o l l o w i n g d i s c u s s i o n . When t r y i n g t o e s t i m a t e t h e p o t e n t i a l volume o f a t r a d e a r e a , t h e a n a l y s t must f i r s t o f a l l e s t a b l i s h a t e n t a t i v e t r a d e a r e a t h a t can be a n a l y z e d , a t t h e same time c r e a t i n g a c o n c e p t u a l image o f t h e completed  shopping c e n t r e i n o r d e r t o determine t h e  s t r e n g t h o f a t t r a c t i o n which would be e x e r t e d by t h e h y p o t h e s i z e d facilities.  I t appears t h a t o n l y a f t e r t a k i n g such s t e p s i s i t  p o s s i b l e t o a c c u r a t e l y determine  the population residing within  t h a t t e n t a t i v e a r e a which then e n a b l e s t h e c a l c u l a t i o n o f t h e t o t a l income and t h e p o t e n t i a l shopping c e n t r e e x p e n d i t u r e s as a p r o p o r t i o n o f t h a t income. of  (The a t t r a c t i o n o f t h e c e n t r e a l s o  c o u r s e p l a y s a l a r g e p a r t i n d e t e r m i n i n g t h e market share t h a t  t h e new c e n t r e i s l i k e l y t o a c h i e v e w i t h i n t h a t p a r t i c u l a r d e f i n e d area.) set  However, i f t h e i n i t i a l t r a d e a r e a b o u n d a r i e s which a r e  a r b i t r a r i l y a r e g r o s s l y i n e r r o r then a l l o f t h e r e s u l t i n g  d a t a on p o p u l a t i o n and income w i t h i n t h a t a r e a a r e a l s o g r o s s l y in error.  F o r example, f i r s t o f a l l t h e t r a d e a r e a l i m i t s a r e  e s t i m a t e d which then means t h a t t h e p o t e n t i a l customers and t h e total  expenditure p o t e n t i a l are confined to t h a t estimated area.  These e s t i m a t e s i n t u r n a r e m u l t i p l i e d by e s t i m a t e d market share p e r c e n t a g e f a c t o r s t o a r r i v e a t an e s t i m a t e d p o t e n t i a l  expenditure  132 from t h a t a r e a f o r t h e new c e n t r e .  This i s a p r e t t y sketchy pro-  c e s s i n v o l v i n g t h e danger o f c u m u l a t i v e e r r o r s i n Judgment, which p r o b a b l y accounts f o r t h e f a c t t h a t many volume e s t i m a t e s d i f f e r s i g n i f i c a n t l y from t h e r e a l i z e d r e s u l t s a f t e r E.  opening.  S e n s i t i v i t y o f t h e Volume E s t i m a t e t o D r i v i n g Time Assumptions D i f f e r e n c e s i n t h e assumption made r e g a r d i n g what d r i v i n g -  time l i m i t t o s e t when d e l i n e a t i n g t h e t r a d e a r e a can have a p r o found e f f e c t on t h e measurement o f p o t e n t i a l volume.  The volume  p o t e n t i a l i s e x t r e m e l y s e n s i t i v e t o changes i n t h i s d r i v i n g - t i m e limit.  F o r example, I f t h e d r i v i n g - t i m e l i m i t i s changed t o  f i f t e e n m i n u t e s from t e n m i n u t e s , t h i s i s a 50% I n c r e a s e i n s t r a i g h t time-distance, but a considerably l a r g e r increase i n the s i z e o f t h e e n c l o s e d a r e a owing t o t h e f a c t t h a t t h e a r e a o f t h e c i r c l e i n c r e a s e s p r o p o r t i o n a t e l y f a s t e r than i t s r a d i u s .  There-  f o r e , I n t h i s example, t h e t i m e - d i s t a n c e has i n c r e a s e d by 50% b u t the a r e a e n c l o s e d w i t h i n t h a t t i m e - d i s t a n c e has i n c r e a s e d by more t h a n 100$.  Therefore, t h e , t o t a l p o t e n t i a l expenditure w i t h i n  f i f t e e n m i n u t e s d r i v i n g - t i m e i s more t h a n t w i c e as l a r g e as t h a t w i t h i n t e n minutes d r i v i n g time. i n t h e d r i v i n g time assumption  O b v i o u s l y , i f such s m a l l changes  can produce such wide v a r i a t i o n s  i n t h e t r a d e a r e a s i z e (and t h e r e f o r e t h e t o t a l r e t a i l  expenditure)  t h e n I t i s d i f f i c u l t t o p l a c e much c o n f i d e n c e i n a s a l e s e s t i m a t e which i s based on a p a r t i c u l a r t r a d e a r e a boundary d r i v i n g assumption that  time  s i n c e t h e r e s u l t s a r e so s e n s i t i v e t o v a r i a t i o n s i n  assumption.  133 Summary The market share method, vacuum c a l c u l a t i o n method, and a n a l o g method a r e a few o f t h e more common methods employed i n a n a l y s e s o f s a l e s volume p o t e n t i a l . .  The a n a l o g method i n v o l v e s  a d j u s t i n g t h e d a t a d e r i v e d from analogous t r a d e areas t o f i t t h e subject s i t u a t i o n .  The market share method s u b j e c t i v e l y d e l i n e a t e s  the t r a d e a r e a a c c o r d i n g t o a r b i t r a r i l y a s s i g n e d d r i v i n g  time  l i m i t s i n conjunction with i n t u i t i v e  competi-  judgments r e g a r d i n g  t i v e f a c i l i t i e s and o t h e r a t t r a c t i o n - r e s i s t a n c e f a c t o r s .  The  method then r e q u i r e s a s u b j e c t i v e assignment o f t h e d e r i v e d t r a d e a r e a p o t e n t i a l t o a l l t h e competing f a c i l i t i e s w i t h i n a t t r a c t i n g range o f t h e s u b j e c t s i t e .  The vacuum c a l c u l a t i o n method a l s o  s u b j e c t i v e l y d e l i n e a t e s the trade area but then a s c e r t a i n s the c u r r e n t r e t a i l volume a c h i e v e d by each e x i s t i n g c o m p e t i t o r and s  only a l l o c a t e d the r e s i d u a l p o r t i o n of the t o t a l p o t e n t i a l to the proposed  facility. Each method has s h o r t c o m i n g s ,  e s p e c i a l l y i n the r e l i a n c e  on a r b i t r a r y and s u b j e c t i v e judgments i n t h e areas o f d e l i n e a t i n g t h e t r a d e a r e a and a s s i g n i n g market s h a r e s .  The l a c k o f more  p r e c i s e , o b j e c t i v e , q u a n t i t a t i v e measurements l e s s e n s t h e degree t o which t h e r e s u l t s can be accepted w i t h c o n f i d e n c e . more, e x t e n s i v e f i e l d  Further-  s u r v e y s a r e o f t e n n e c e s s a r y t o improve t h e  a c c u r a c y o f those s u b j e c t i v e judgments. I n an attempt  t o overcome some o f t h e shortcomings  d i s c u s s e d above, v a r i o u s r e s e a r c h e r s have proposed t h e use o f models expressed  i n mathematical  f o r m u l a e as a means o f g e n e r a t i n g  e s t i m a t e s more q u i c k l y and c o n s i s t e n t l y based on more o b j e c t i v e l y q u a n t i f i e d measurements. chapter.  These models a r e d i s c u s s e d i n t h e n e x t  CHAPTER VI MODELS PGR  DETERMINING TRADE AREA POTENTIAL Introduction  A model can be d e s c r i b e d  as f o l l o w s :  A model l i t e r a l l y c o n s i s t s of "named" v a r i a b l e s embedded i n m a t h e m a t i c a l f o r m u l a e ( s t r u c t u r a l r e l a t i o n s ) , numerical constants (parameters), and a c o m p u t a t i o n a l method o f t e n programmed f o r t h e computer ( a l g o r i t h m ) . 1  Models attempt t o i d e n t i f y p r i m a r y v a r i a b l e s which are s u f f i c i e n t to describe any  one  a r e l a t i o n s h i p , while recognizing  f a c t o r o r s e v e r a l d i f f e r e n t f a c t o r s may  w e i g h t i n g of t h o s e v a r i a b l e s .  that  a f f e c t the  The p r o b a b i l i t y model a t t e m p t s t o  d e s c r i b e t o what e x t e n t something i s l i k e l y t o be the e f f e c t of some o t h e r c a u s a l v a r i a b l e s .  I f i t i s n o t an e x a c t " d e t e r m i n i s t i c "  r e l a t i o n s h i p , the p r o b a b i l i t y model a l l o w s f o r the i n f l u e n c e unknown f a c t o r s by s t a t i n g the e f f e c t i n terms o f a o c c u r r e n c e of t h a t outcome.  of  proportionate  I n t h i s sense, the p r o b a b i l i s t i c  models do n o t produce the e x a c t e f f e c t o f a number o f  causal  v a r i a b l e s , but r a t h e r s t a t e the l i k e l i h o o d o f t h a t e f f e c t o c c u r r i n g . The  d i f f e r e n c e between l i k e l i h o o d and  r e a l i t y i s a f u n c t i o n of con-  d i t i o n a l f a c t o r s which a f f e c t the c a u s a l v a r i a b l e s and produce a different result. Models t h e n attempt t o d e s c r i b e  average u n i f o r m i t i e s i n  b e h a v i o u r which can be expressed i n m a t h e m a t i c a l f o r m . m a t i c a l e q u a t i o n s are s t r u c t u r e d r e l a t i o n s h i p s of  The  mathe-  abstracted  I . S. Lowry, "A S h o r t Course i n Model D e s i g n , " J o u r n a l A m e r i c a n I n s t i t u t e of P l a n n e r s , V o l . 31, 1965, p. 159.  of  the  135  v a r i a b l e s , and on t h e a v e r a g e , b e h a v i o u r d e s c r i b e d i n these m a t h e m a t i c a l  i s expected t o o c c u r as  formulas.  E a r l y Models o f R e t a i l G r a v i t a t i o n R e i l l y and Converse Over t h e p a s t s e v e r a l decades much a t t e n t i o n h a s f o c u s e d on t h e g r a v i t y concept o f human i n t e r a c t i o n .  E a r l y models o f t h i s  type were a n a l o g i e s t o Newton's U n i v e r s a l Law o f G r a v i t a t i o n which i n g e n e r a l terms s t a t e d t h a t t h e f o r c e between two masses was d i r e c t l y p r o p o r t i o n a t e t o t h e s i z e o f each mass and I n v e r s e l y p r o p o r t i o n a t e t o t h e square o f t h e d i s t a n c e s s e p a r a t i n g them. T h i s i s expressed  i n the formula: GMm  where F = f o r c e , G = a u n i v e r s a l c o n s t a n t  (gravitational  constant),  M = one mass, m = t h e o t h e r mass, and d = t h e d i s t a n c e between t h e masses. I n g e n e r a l terms, t h e g r a v i t y concept o f human I n t e r a c t i o n d i s p l a y s i t s s i m i l a r i t y t o Newton's l a w by p o s t u l a t i n g t h a t i n t e r a c t i o n between two c e n t r e s o f p o p u l a t i o n  concentration  v a r i e s d i r e c t l y w i t h some f u n c t i o n o f t h e p o p u l a t i o n s i z e o f t h e two  c e n t r e s and v a r i e s I n v e r s e l y w i t h some f u n c t i o n o f t h e d i s -  t a n c e s e p a r a t i n g them. Most o f t h e "laws" o f r e t a i l g r a v i t a t i o n i n m a r k e t i n g l i t e r a t u r e a r e based t o a l a r g e e x t e n t on t h e s t u d i e s begun by 2 R e i l l y i n 1927.  R e i l l y ' s s t u d i e s were conducted o v e r a t h r e e  2 W. J . R e i l l y , The Law o f R e t a i l G r a v i t a t i o n , 2nd e d . , New Y o r k , W i l l i a m J . R e i l l y Company, 1953.  136  y e a r p e r i o d w i t h the o b j e c t o f d i s c o v e r i n g some method f o r m e a s u r i n g the r e t a i l i n f l u e n c e o f a c i t y ( o r t h e amount o f t r a d e drawn from I t s s u r r o u n d i n g a r e a s ) . of r e f i n e m e n t s  Converse has o f f e r e d a number 3  and e x t e n s i o n s t o t h e r e s u l t s o b t a i n e d by  Reilly.  B a s i c a l l y , t h e combined e f f o r t s o f R e i l l y and Converse a r e summarized  i n the s i x e q u a t i o n s d e s c r i b e d below.  Each e q u a t i o n i s  examined a l o n g w i t h a b r i e f d i s c u s s i o n o f the methodology by which e m p i r i c a l support f o r them was The o r i g i n a l l a w was  derived. s t a t e d by  Reilly:  Two c i t i e s a t t r a c t r e t a i l t r a d e from any i n t e r m e d i a t e c i t y o r town i n the v i c i n i t y of t h e b r e a k i n g p o i n t a p p r o x i m a t e l y i n d i r e c t p r o p o r t i o n t o the p o p u l a t i o n o f t h e two c i t i e s and i n i n v e r s e p r o p o r t i o n t o the square o f the d i s t a n c e s from t h e s e two c i t i e s t o the i n t e r m e d i a t e town. M a t h e m a t i c a l l y t h i s statement can be w r i t t e n : Ba _ P a Bb  x  Pb  Db  c  Da  (VI - 1)  2  where Ba and Bd = p r o p o r t i o n s o f r e t a i l t r a d e from the i n t e r m e d i a t e town a t t r a c t e d by c i t i e s A and B r e s p e c t i v e l y ; P a and Pb = t h e p o p u l a t i o n s o f c i t i e s A and B; and Da and Db = the d i s t a n c e s from the i n t e r m e d i a t e town t o c i t i e s A and  B.  Converse and h i s a s s o c i a t e s developed  an e q u a t i o n known  as the b r e a k i n g p o i n t f o r m u l a , w r i t t e n : Db = Da +  Db (VI -  11)  P. D. Converse, A Study of R e t a i l Trade A r e a s i n E a s t C e n t r a l I l l i n o i s , Urbana, U n i v e r s i t y o f I l l i n o i s P r e s s , 1943; R e t a i l Trade A r e a s i n I l l i n o i s , Urbana, U n i v e r s i t y o f I l l i n o i s P r e s s , 1946; "New Laws o f R e t a i l G r a v i t a t i o n , " J o u r n a l o f M a r k e t i n g . XIV, O c t o b e r , 1949. 4 I b i d . , p. 9. J  137 where Db = d i s t a n c e from c i t y B t o t h e b r e a k i n g p o i n t , o r t h a t p o i n t where t r a d e ceases t o be a t t r a c t e d t o c i t y B and i s i n s t e a d a t t r a c t e d t o c i t y A. I n a d d i t i o n , Converse developed a n o t h e r l a w o f r e t a i l gravitation, stated: A t r a d i n g c e n t r e and a town i n o r n e a r i t s t r a d e a r e a d i v i d e t h e t r a d e o f t h e town approximately i n d i r e c t p r o p o r t i o n t o the p o p u l a t i o n o f t h e two towns and i n v e r s e l y as the squares o f t h e d i s t a n c e f a c t o r s , using,. 4 as t h e d i s t a n c e f a c t o r o f t h e home town.5  Mathematically,  t h i s i s expressed:  Ba - P a Bb  x  4  2  > •  Hb  ( V I - 111)  where Ba = t h e p r o p o r t i o n o f t h e t r a d e g o i n g t o t h e o u t s i d e town; Bb = t h e p r o p o r t i o n o f t r a d e r e t a i n e d by t h e home town; Hb = p o p u l a t i o n o f t h e home town; P a = p o p u l a t i o n o f t h e o u t s i d e town; and 4 = t h e i n e r t i a f a c t o r .  According  t o Converse, t h e i n e r t i a -  d i s t a n c e f a c t o r r e f l e c t s t h e e f f o r t t o overcome t h e i n e r t i a o f 6 t r a v e l l i n g t o a s t o r e c l o s e a t hand. I f a s m a l l town l o s e s t r a d e t o more t h a n one l a r g e r town, t h e n t h e p r o p o r t i o n l o s t t o these towns i s determined by u s i n g m u l t i p l e s o f 4 t o o b t a i n a t o t a l 7 inertia factor. Converse s t a t e s t h a t e x p e r i m e n t a t i o n w i t h t h i s 8 method h a s l e d him t o c o n c l u d e t h a t i t works s a t i s f a c t o r i l y . Two more e q u a t i o n s have been t e n t a t i v e l y proposed by Converse t o i n c r e a s e p r e d i c t i v e a c c u r a c y  i n those cases where a  5 Converse, J o u r n a l o f M a r k e t i n g , X I V , p. 382. 6 Ibid.  8  Ibid.  138 t r a d i n g c e n t r e i s more than twenty t i m e s t h e s i z e o f the i n t e r m e d i a t e town.  They a r e the same as the above two e q u a t i o n s  except  t h a t the d i s t a n c e e x p o n e n t i a l parameter i s changed t o 3 a l t h o u g h Converse admits t h a t i n s u f f i c i e n t d a t a had been g a t h e r e d i n s u p p o r t o f t h i s m o d i f i c a t i o n , hence h i s l a b e l l i n g o f t h i s m o d i f i 9  cation  "tentative." The f i n a l e q u a t i o n developed  t i o n of equation (VI-111).  by Converse I s a m o d i f i c a -  Because o f u r b a n c o n g e s t i o n , n e i g h -  b o u r i n g s m a l l towns were found t o r e t a i n a l a r g e r p r o p o r t i o n o f t h e i r f a s h i o n goods than e q u a t i o n (VI-111) p r e d i c t s . c o l l e c t i o n , I t was s h o u l d be 1.5  determined  A f t e r data  t h a t the i n e r t i a - d i s t a n c e f a c t o r  I n s t e a d o f 4.  The above-mentioned e q u a t i o n s summarize the l a w s o f retail gravitation.  They were d e v e l o p e d ,  s t r u c t u r e d , and q u a n t i -  f i e d on the b a s i s o f e m p i r i c a l o b s e r v a t i o n s . determine  R e i l l y attempted  to  the c a u s a l f a c t o r s which would e x p l a i n the phenomenon  o f the d i v i s i o n o f r e t a i l t r a d e between two c i t i e s , and a l s o t o determine what r e l a t i o n s h i p the f a c t o r s bore t o each o t h e r t o the phenomenon.  and  R e i l l y a s c e r t a i n e d t h a t the s p e c i f i c f a c t o r s  o f p o p u l a t i o n o f the c i t i e s and d i s t a n c e from the c i t i e s must be the d e t e r m i n i n g f a c t o r s . He s t a t e s : I t i s so r e a d i l y a c c e p t a b l e t h a t the amount o f o u t s i d e t r a d e w h i c h a c i t y enjoys i n any s u r r o u n d i n g town i s a d i r e c t f u n c t i o n of the p o p u l a t i o n o f t h a t c i t y and an i n v e r s e f u n c t i o n o f the d i s t a n c e o f the c i t y from tflwn, t h a t the g e n e r a l l a w needs no s u p p o r t .  I b i d . , p.  383.  R e i l l y , The Law  o f R e t a i l G r a v i t a t i o n , p.  71.  139  R e l l l y reasons t h a t i t i s inconvenient t r a v e l t o shop.  and c o s t l y f o r p e o p l e t o  B u t on t h e o t h e r hand, he i s n o t n e a r l y so c e r -  t a i n that population i s the correct v a r i a b l e i n a d i r e c t ship.  relation-  He mentions t h a t i t i s n o t s i m p l y a m a t t e r o f a l a r g e  c l u s t e r of p e o p l e alone w h i c h causes o t h e r p e o p l e t o t r a v e l t o t h a t c i t y t o shop, b u t r a t h e r i t i s t h e e x i s t e n c e o f such a t t r a c t i o n s as l a r g e r e t a i l s t o r e s w i t h a wide v a r i e t y and depth o f goods, s o c i a l and r e c r e a t i o n a l a t t r a c t i o n s , and t h e i n f l u e n c e o f the l a r g e c i t y ' s a d v e r t i s i n g media which cause p e o p l e t o shop there.  I n f a c t , he mentions a l o n g l i s t o f f a c t o r s w h i c h may i n -  f l u e n c e t h e d i v i s i o n o f t r a d e , and d i s t a n c e and p o p u l a t i o n a r e o n l y two o f t h e many.  However, R e l l l y r e a s o n s t h a t a t t r a c t i o n s  o f f e r e d i n t h e c i t y a r e o n l y f e a s i b l e as a r e s u l t o f t h e l a r g e p o p u l a t i o n , and t h e r e f o r e , t h e degree of a t t r a c t i o n must be c o r r e l a t e d s t r o n g l y w i t h p o p u l a t i o n , w h i c h l e a d s R e i l l y t o conclude t h a t i n view of t h i s r e l a t i o n s h i p , i t i s reasonable  t o use popu11  l a t i o n as a "proxy" v a r i a b l e f o r t h e s e o t h e r f a c t o r s . sums up t h e p r e c e d i n g  Reilly  argument as f o l l o w s :  ...evidence secured - shows t h a t t h e p o p u l a t i o n o f a c i t y and t h e d i s t a n c e from t h a t c i t y t o a n o t h e r comparable c i t y a r e t h e p r i m a r y f a c t o r s that condition the r e t a i l trade influence of t h a t c i t y ; t h a t p o p u l a t i o n and d i s t a n c e a r e r e l i a b l e indexes of the behaviour of other f a c t o r s ; t h a t o t h e r f a c t o r s a r e e i t h e r so c l o s e l y r e l a t e d t o , o r so d i r e c t l y dependent upon, t h e s e two p r i m a r y f a c t o r s t h a t t h e e f f e c t s of t h e dependent f a c t o r s tend t o b a l a n c e out when c i t i e s a r e compared on t h e b a s i s o f popul a t i o n and d i s t a n c e . 1 2  I b i d . , pp. 30 - 3 2 . I b i d . , pp. 31 - 3 2 .  140 T h i s g e n e r a l statement was Ba _ P a  H  Bh  W  Pb  Db  x  Da  then expressed  as t h e " g e n e r a l  law":  n  (YI . y i l )  11  H i s r e s e a r c h then attempted t o e v a l u a t e e m p i r i c a l l y the exponents f o r p o p u l a t i o n and d i s t a n c e . He concluded s h o u l d he one,  t h a t the v a l u e of the p o p u l a t i o n exponent  a l t h o u g h no evidence  i s c i t e d i n support o f t h i s  contention. The d i s t a n c e exponent was  c a l c u l a t e d 225 times by  s e l e c t i n g an i n t e r m e d i a t e town w h i c h was  first  a breaking point (deter-  mined by a n a l y z i n g c r e d i t e n q u i r i e s t o a s c e r t a i n the p o i n t where shoppers from o u t s i d e the c i t y ceased t o a p p l y f o r c r e d i t a t s t o r e s i n the l a r g e r c i t y ) , and then p l u g g i n g d i s t a n c e s (highway m i l e s ) and p o p u l a t i o n s I n t o h i s f o r m u l a and s o l v i n g f o r t h e d i s t a n c e exponent.  The v a l u e s he c a l c u l a t e d ranged from 0 t o 12.5,  g r e a t e s t number of o b s e r v a t i o n s any s i n g l e v a l u e - r a n g e r e s u l t , he  but  the  (87 out o f 225 o b s e r v a t i o n s ) f o r  o c c u r r e d i n the range 1.51  t o 2.5.  As  a  concluded: a c l e a r mode o c c u r s i n t h e range o f 1.51 2.50 w h i c h shows t h a t t h e exponent o f d i s t a n c e i s n e a r e r t o t h e second power than t o any o t h e r even power.^3  The f a c t t h a t the e x p o n e n t i a l v a l u e chosen by R e i l l y was o f a d i s t r i b u t i o n of v a l u e s , and t h a t the v a l u e was has tended t o be f o r g o t t e n .  P r a c t i t i o n e r s who  only  one  a modal v a l u e ,  use t h i s model  o f t e n assume t h a t i t i s p r e c i s e and r i g o r o u s , so t h a t when erroneous r e s u l t s are generated  i n s p e c i f i c s i t u a t i o n s , the e x p o n e n t i a l v a l u e  R e i l l y , Methods f o r t h e Study o f R e t a i l R e l a t i o n s h i p s , p.  50.  141 Is  o f t e n a t t a c k e d and denounced f o r b e i n g t o o p r e c i s e when i n  f a c t i t was n e v e r i n t e n d e d t o be. As R e i l l y e x p l a i n s : Since the c a l c u l a t i o n o f the appropriate exponent i n any p a r t i c u l a r case i s a comp l i c a t e d problem i n m a t h e m a t i c s , and s i n c e the r e t a i l e r s who w i l l u s e t h i s l a w , as a r u l e , are not mathematicians, the a p p l i c a t i o n o f t h e l a w has been s i m p l i f i e d ^ . s o t h a t o r d i n a r y r e t a i l e r s can u s e i t . 1  4  He then t e s t e d h i s e q u a t i o n on t h i r t y p a i r s o f t r a d i n g c e n t r e s t o d e t e r m i n e i f p r e d i c t e d b r e a k i n g p o i n t s matched c l o s e l y w i t h t h e results of f i e l d  s t u d i e s , and concluded  t h a t h i s l a w was r e a s o n a b l y  accurate. Converse l a t e r p u b l i s h e d a s t u d y i n which he r e p o r t e d t h a t h i s e f f o r t s t o check R e i l l y ' s l a w r e s u l t e d i n f a i r l y  close  c o r r e l a t i o n between t h e p r e d i c t i o n s and t h e e m p i r i c a l r e s u l t s . on t h e whole, i t works w i t h a r e l a t i v e l y h i g h degree o f a c c u r a c y . 5 1  However, i n a l a t e r s t u d y , he c a u t i o n e d : In a r e a s where t h e r e i s l e s s d i f f e r e n c e i n s i z e between t h e p r i m a r y and secondary t r a d i n g c e n t r e s o r between t h e t r a d i n g c e n t r e s and t h e towns from which they draw t r a d e , t h e l a w o f r e t a i l g r a v i t a t i o n may perhaps n o t p r e d i c t t h e movement o f t r a d e w i t h t h e a c c u r a c y found i n t h e t e r r i t o r y here s t u d i e d . 1 6  In a r e l a t i v e l y r e c e n t s t u d y , Jung p r e s e n t e d some d a t a 17 w h i c h he m a i n t a i n s r e f u t e s R e i l l y ' s l a w . H i s argument c e n t r e d I b i d . , p. 16. 15  P. D. Converse, A Study o f R e t a i l Trade A r e a s I n E a s t C e n t r a l I l l i n o i s , pp. 23 - 5^K \ P. D. Converse, R e t a i l Trade A r e a s i n I l l i n o i s , p . 1 8 . 17 ' A. P. Jung, " I s R e i l l y ' s Law o f R e t a i l G r a v i t a t i o n Always True?" J o u r n a l o f M a r k e t i n g . XXIV, O c t o b e r , 1959, p. 62. 1  6  142 on t h e f a c t t h a t h i s e m p i r i c a l l y d e r i v e d b r e a k i n g p o i n t s d i d n o t f i t t h e p r e d i c t i o n s produced by R e i l l y ' s l a w .  I t seems, though,  t h a t what h a s been d i s p u t e d i n t h i s study i s n o t t h e " g e n e r a l l a w , " b u t r a t h e r t h e s p e c i f i c e q u a t i o n i n w h i c h t h e v a l u e o f one for  t h e p o p u l a t i o n exponent and t h e v a l u e o f two f o r t h e d i s t a n c e  exponent a r e employed.  But t h i s i s not p a r t i c u l a r l y s u r p r i s i n g i n  v i e w o f b o t h R e i l l y ' s and Converse's a d m i t t e d  r e c o g n i t i o n that the  v a l u e o f t h e d i s t a n c e exponent was o n l y a modal v a l u e o u t o f a r a t h e r broad d i s t r i b u t i o n o f e m p i r i c a l l y d e r i v e d v a l u e s . Limitations I n R e i l l y * s l a w , t h e a t t r a c t i o n o f p o p u l a t i o n and t h e friction  o f d i s t a n c e both a r e c o n s i d e r e d .  R e i l l y ' s l a w and concludes  But N e l s o n examines  t h a t " a l l t h i s l a w says i s t h a t p e o p l e  w i l l n o r m a l l y go t o t h e b i g g e s t p l a c e t h e y can g e t t o t h e easiest."  1 8  There i s t h e problem o f a p p l y i n g R e i l l y ' s l a w i n subu r b a n a r e a s where t h e i n f l u e n c e o f competing r e t a i l overlaps.  centres often  R e i l l y h i m s e l f observed t h a t "the i n f l u e n c e o f two  nearby c i t i e s a l m o s t i n v a r i a b l y o v e r l a p , " and f e l t t h a t h i s l a w 19 was  i n a p p r o p r i a t e under such c i r c u m s t a n c e s .  As a r e s u l t many  w r i t e r s have f e l t t h a t t h e l a w i s i n a p p r o p r i a t e f o r measuring t h e i n f l u e n c e o f r e t a i l c e n t r e s i n t h e suburban s i t u a t i o n where such o v e r l a p p i n g o f c o m p e t i t i v e I n f l u e n c e i s common. Some a u t h o r s , however, do n o t a g r e e . Nelson,  F o r example, Baker  The S e l e c t i o n o f R e t a i l L o c a t i o n s , p. 149  R e i l l y , The Law o f R e t a i l G r a v i t a t i o n , p. 59.  143 and Funaro f e l t t h a t when measuring the p u l l of a l a r g e suburban shopping  c e n t r e , S e i l l y ' s law may be a p p l i e d J u s t as a p t l y as i t 20  has been t o town shopping t h a t the l a w was c e n t r e s , and  developed  areas.  However Nelson  recognizes  to measure the Impact o f r u r a l t r a d i n g  even w i t h a d a p t a t i o n s t o f i t the l a w t o u r b a n s i t u a -  t i o n s , t h e r e i s c o n s i d e r a b l e doubt as t o i t s a p p l i c a b i l i t y i n 21 such c a s e s .  The l a w was  o r i g i n a l l y c r e a t e d t o t e s t the drawing  power o f p a i r s of r u r a l t r a d i n g c e n t r e s between which were farm a r e a s c o n t a i n i n g few a l t e r n a t i v e shopping all.  f a c i l i t i e s o r none a t  Even w i t h a l l the a d a p t a t i o n s which have been made t o t r y  and f o r c e t h i s law t o f i t u r b a n s i t u a t i o n s , a law c r e a t e d t o measure t h e impact o f r u r a l t r a d i n g c e n t r e s cannot be used i n d i s c r i m i n a t e l y t o e s t i m a t e the volume o f u r b a n shopping o r new  shopping  centres.  districts  In m e t r o p o l i t a n regions I t i s extremely  d i f f i c u l t t o employ t h i s model because c o m p e t i t i o n i s found i n so many d i f f e r e n t d i r e c t i o n s a t v a r y i n g l e v e l s o f drawing power i n tensity.  F u r t h e r m o r e , d i s t a n c e d i s t i n c t i o n s may  o f moments.  be o n l y a m a t t e r  R e i l l y ' s law i n d i c a t e s a r e l a t i v e l y f i x e d  perimeter  o r b r e a k i n g p o i n t f o r the t r a d e a r e a , whereas i n the u r b a n s i t u a t i o n , the t r a d e a r e a b o u n d a r i e s  v a r y and o v e r l a p c o n s i d e r a b l y  depending on the degree o f a t t r a c t i o n o f each a l t e r n a t e o u t l e t and on the r e l a t i v e a c c e s s i b i l i t y and d i s t a n c e between them. Much of the c r i t i c i s m of R e i l l y ' s law has f o c u s e d the exponents, p a r t i c u l a r l y the exponent o f d i s t a n c e .  Huff  on noted  t h a t t h e m a j o r i t y o f market a n a l y s t s u s i n g the f o r m u l a have Baker and F u n a r o , Shopping C e n t r e s :  D e s i g n and O p e r a t i o n , p.  N e l s o n , The S e l e c t i o n o f R e t a i l L o c a t i o n s , p.  150.  8.  144 a p p a r e n t l y assumed t h a t the d i s t a n c e exponent which R e i l l y e s t i m a t e d as v a l i d f o r i n t e r - u r b a n r e t a i l movements was 22 for  intra-urban areas.  The  also valid  i n t r a - u r b a n s i t u a t i o n i s j u s t not  as s i m p l e as the i n t e r - u r b a n s i t u a t i o n where market c e n t r e s consumers are more w i d e l y s c a t t e r e d and I s o l a t e d .  and  In short,  i n t e r r u p t i v e I n f l u e n c e s are f a r more p r e v a l e n t and i n t e n s e i n the suburban s i t u a t i o n . F o r h i s 225 r a n g i n g from G.O  cases R e i l l y o b t a i n e d d i s t a n c e exponents  t o 12.5  but s e l e c t e d 2.0 because the modal v a l u e  f e l l w i t h i n the range.1.51 t o 2.5. o n l y o n e - t h i r d of the v a l u e s .  l e t the modal c l a s s c o n t a i n e d  F u r t h e r m o r e , t h i s v a l u e was  only  meant t o a p p l y t o shopping goods, and no e v i d e n c e i s c i t e d f o r what t h e v a l u e would be f o r o t h e r , o r more s p e c i f i c , of m e r c h a n d i s e .  S u b s e q u e n t l y , new  categories  exponents were suggested by  Converse but these too a p p l y t o broad c a t e g o r i e s of merchandise and are i n t e n d e d f o r use i n the i n t e r - u r b a n s e t t i n g . has  suggested t h a t the d i s t a n c e exponent i t s e l f may  i n v e r s e l y r e l a t e d t o t h e s i z e of p o p u l a t i o n .  Carrothers be a v a r i a b l e ,  He a l s o contends t h a t  p o p u l a t i o n s o f d i f f e r e n t s i z e s should be r a i s e d t o v a r i a b l e powers g r e a t e r t h a n one, p a r t l y on account o f the g r e a t e r i n f l u e n c e e x e r t e d by l a r g e r c e n t r e s as a r e s u l t of t h e i r c o l l e c t i v e l y g r e a t e r 23 a t t r a c t i v e power.  From our d i s c u s s i o n i n Chapter IV, i t would  a l s o be l o g i c a l t o assume t h a t t h e d i s t a n c e exponent would v a r y " D. L. H u f f , D e t e r m i n a t i o n o f I n t r a - U r b a n R e t a i l Trade A r e a s , U n i v e r s i t y of C a l i f o r n i a , Graduate School o f B u s i n e s s A d m l n i s t r a t i o n , Los A n g e l e s , 1962, p. 5. 23 G. A. P. C a r r o t h e r s , "An H i s t o r i c a l Review o f the G r a v i t y and P o t e n t i a l Concepts o f Human I n t e r a c t i o n , " J o u r n a l of the American I n s t i t u t e of P l a n n e r s , V o l . 22, 1956, pp. 94 - 102.  145 w i t h improved t r a n s p o r t a t i o n , b e t t e r a c c e s s i b i l i t y , g e o g r a p h i c i n f l u e n c e s i n s p e c i f i c a r e a s , and w i t h demographic v a r i a t i o n s , a l l o f which a r e s u b j e c t t o g r e a t e r v a r i a t i o n i n t h e i n t r a - u r b a n situation. The l i m i t a t i o n s o f R e i l l y ' s l a w a r e n o t , however, conf i n e d to the exponential values.  The main s h o r t c o m i n g i s t h a t i t  c o n s i d e r s o n l y two v a r i a b l e s , p o p u l a t i o n and d i s t a n c e , i n i t s g e n e r a l f o r m u l a as f a c t o r s i n r e t a i l d r a w i n g power whereas i t i s known t h a t s e v e r a l o t h e r f a c t o r s do e x e r t c o n s i d e r a b l e i n f l u e n c e on consumer s p a t i a l b e h a v i o u r tance.  i n a d d i t i o n t o p o p u l a t i o n and d i s -  R e l l l y was n o t unaware of t h e importance o f o t h e r v a r i a b l e s  t h a t m i g h t a f f e c t t h e g e o g r a p h i c d i s t r i b u t i o n o f consumer p a t r o n age.  He d i d f e e l , however, t h a t t h e o t h e r f a c t o r s were o f m i n o r  i m p o r t a n c e compared t o t h e two named. P o p u l a t i o n i s a p r o x y v a r i a b l e f o r a t t r a c t i o n , and d i s tance i s a proxy v a r i a b l e f o r e f f o r t .  T h i s a l s o b a s i c a l l y means  t h a t p o p u l a t i o n i s a p r o x y v a r i a b l e f o r b e n e f i t s , and d i s t a n c e i s a proxy v a r i a b l e f o r c o s t s .  The use o f t h e p r o x y v a r i a b l e s popu-  l a t i o n and d i s t a n c e as s u f f i c i e n t l y r e p r e s e n t a t i v e c a u s a l v a r i a b l e s has been t h e f o c u s o f c o n s i d e r a b l e c r i t i c i s m .  Various  researchers  o v e r the y e a r s have suggested r e p l a c i n g p o p u l a t i o n i n t h e f o r m u l a w i t h f r o n t footage  of r e t a i l  space, o r square f e e t o f s e l l i n g  a r e a , o r d o l l a r s a l e s volumes. for  D r i v i n g time has been s u b s t i t u t e d  distance i n miles ( r e a l i z i n g that time-distance i s a better  i n d i c a t o r o f t h e c o s t s p e r c e i v e d by t h e consumer i n making t h e t r i p ) although t h i s m o d i f i c a t i o n s t i l l tends t o ignore the p o s s i b i l i t y of s i g n i f i c a n t walk-in business.  However, even w i t h  t h e s e m o d i f i c a t i o n s , t h e l a w can be f r e q u e n t l y i n a c e u r a t e , because  146  still  o n l y f l o o r space ( f o r example) and d r i v i n g time are con-  s i d e r e d as a f f e c t i n g consumers' shopping h a b i t s . t h e s e are two I m p o r t a n t f a c t o r s and t h e i r appeal  I t i s true that as p r o x y v a r i a b l e s  i n the f o r m u l a l i e s i n the f a c t t h a t they are e a s i l y q u a n t i f i a b l e variables.  But g r o s s i n a c c u r a c y can r e s u l t when o t h e r e q u a l l y  s i g n i f i c a n t f a c t o r s such as t h o s e o u t l i n e d and p r e s e n t e d  in  C h a p t e r IV a r e i g n o r e d , f a c t o r s which can r i g h t l y i n f l u e n c e the e x t e n t and I n t e n s i t y of consumer p a t r o n a g e . Such f a c t o r s which w a r r a n t c o n s i d e r a t i o n i n c l u d e the following:  the e f f e c t s of d i s t a n c e v a r y w i t h the type of merchan-  d i s e under c o n s i d e r a t i o n ; the i m p a c t o f c o m p e t i t i o n cannot be r e s t r i c t e d t o o n l y p a i r s of competing o u t l e t s as i n R e i l l y ' s but a l s o must i n c l u d e a l l o t h e r competing o u t l e t s i n the o f the s u b j e c t c e n t r e ; m e r c h a n d i s i n g c a p a b i l i t i e s and  law  vicinity  parking  f a c i l i t i e s i n the s m a l l e r c e n t r e might be f a r s u p e r i o r t o those i n t h e l a r g e r c e n t r e , a f a c t which would tend t o r e s u l t i n a h i g h e r c a p t u r e of patronage a t the s m a l l e r c e n t r e than would be i n d i c a t e d s t r i c t l y on the b a s i s of p o p u l a t i o n o r square f o o t a g e  of  selling  a r e a a l o n e ; d i f f e r e n c e s i n a c c e s s i b i l i t y between competing  centres  e i t h e r as a r e s u l t o f b e t t e r t r a n s p o r t a t i o n f a c i l i t i e s and  road  networks, or d i f f e r e n t geographical  o r man-made b a r r i e r s can produce  v a r i a t i o n s i n consumer p a t r o n a g e w h i c h would not n e c e s s a r i l y be e v i d e n t w i t h t h i s model which c o n s i d e r s o n l y d i s t a n c e m o d i f i e d by a p a r t i c u l a r exponent; the b r e a d t h of s e l e c t i o n , t h e p r i c e ranges and t h e q u a l i t y of the merchandise o f f e r e d can s i g n i f i c a n t l y  affect  t h e drawing power of a c e n t r e and extend and i n t e n s i f y i t s a t t r a c t i v e power, a f a c t which does not appear t o r e c e i v e adequate r e c o g n i t i o n i n a f o r m u l a which c o n s i d e r s o n l y s i z e ( i n e i t h e r p o p u l a t i o n  147 o r square f o o t a g e ) as the a t t r a c t i v e v a r i a b l e ; the r e l a t i o n s h i p s between merchandise o f f e r i n g s and the demographic c o m p o s i t i o n of the s u r r o u n d i n g market a r e a a r e n o t e x p l i c i t l y c o n s i d e r e d - i f the merchandise o f f e r e d does not p r o p e r l y match the d e s i r e s of the consumers i n t h e a r e a , the a t t r a c t i v e power o f t h a t c e n t r e may  be  l e s s than t h a t I n d i c a t e d by t h e s i z e v a r i a b l e a l o n e ; the i n f l u e n c e o f socio-economic  f a c t o r s on consumer t r a v e l and the d i f f e r e n t  market a r e a s f o r d i f f e r e n t t y p e s o f goods i s n o t accounted  explicitly  f o r ; o t h e r a t t r a c t i v e a s p e c t s such as the c e n t r e ' s  r e p u t a t i o n , the r e p u t a t i o n o f member s t o r e s , a r c h i t e c t u r a l f e a t u r e s , a m e n i t i e s , community f a c i l i t i e s , l e i s u r e f a c i l i t i e s , t h e e x t e n t and q u a l i t y and e f f e c t i v e n e s s o f p r o m o t i o n a l programs, the d i f f e r e n t c l a s s e s o f merchandise o f f e r e d (from l o w e r to h i g h e r o r d e r ) , the v a r i e t y o f t e n a n t - t y p e s , the image p r o j e c t e d by the c e n t r e , and the h o u r s o f b u s i n e s s o f f e r e d f o r consumer convenience produce v a r i a t i o n s i n a t t r a c t i v e power which are n o t  a l l may represented  a d e q u a t e l y by the s i n g l e v a r i a b l e o f s i z e ( e i t h e r p o p u l a t i o n o r square f o o t a g e ) .  The f a i l u r e o f R e i l l y ' s law i n p a r t i c u l a r  cumstances I s r e l a t e d to these o t h e r f a c t o r s .  Reilly's  cir-  law  measures f o r c e s t h a t a r e g r o s s i n scope and i g n o r e s o r i n a d e q u a t e l y accounts f o r other important v a r i a b l e s .  I t i s h a r d , and  indeed  sometimes i m p o s s i b l e , to a s s i g n t r u e n u m e r i c a l v a l u e s to v a r i a b l e s such as those mentioned above (and d i s c u s s e d more c o m p l e t e l y i n Chapter I V ) , but they cannot be i g n o r e d and so must be g i v e n a t l e a s t an i n t u i t i v e w e i g h t i n g .  148 More fundamental i s the c r i t i c i s m t h a t the g r a v i t y concept i s e s s e n t i a l l y an e m p i r i c a l n o t i o n w i t h l i t t l e c o n t e n t ; t h a t i s , i t cannot e x p l a i n observed l i m i t a t i o n was  expressed  by Thompson who  theoretical  regularities.  This  states that:  such l a w s must be regarded as l i t t l e more t h a n h i s t o r i c a l " a c c i d e n t s " i n absence o f t r a c i n g out a t h e o r e t i c a l c o n n e c t i o n between t h e i r e m p i r i c a l l y determined w e i g h t s and exponents and the c o r r e s p o n d i n g b e h a v i o u r a l v a r i a b l e s on w h i c h they r e s t . ^ 2  The most t h a t can be s a i d i n defence o f R e i l l y ' s law i s t h a t a l l e l s e b e i n g e q u a l , presumably t h e g r e a t e r the s i z e o f a c e n t r e the g r e a t e r may its to  shopping  be expected  t o be i t s r e t a i l p r o v i s i o n and  therefore  a t t r a c t i o n , and presumably the g r e a t e r the d i s t a n c e  be t r a v e l l e d t o r e a c h t h e s e f a c i l i t i e s the g r e a t e r w i l l be  the  e x p e n d i t u r e o f t i m e , e f f o r t , and c o s t , and hence the g r e a t e r the f r i c t i o n to t r a v e l . presented  But as mentioned above the law as  originally  does not p r o v i d e an e n t i r e l y dependable t o o l f o r p r o -  j e c t i o n , and appears t o r e q u i r e c o n s i d e r a b l e i n t u i t i v e s u b j e c t i v e a d j u s t m e n t i f i t i s t o be u s e f u l a t a l l i n shopping  centre  patronage e s t i m a t i n g . R e i l l y ' s law i s d e t e r m i n i s t i c i n n a t u r e .  I t merely  o f f e r s a f o r m u l a f o r c a l c u l a t i n g the b r e a k i n g p o i n t between t r a d e a r e a s , which i s d e f i n e d as a p a r t i c u l a r d i s t a n c e between the c e n t r e i n q u e s t i o n and a competing c e n t r e a t which the r e l a t i v e a t t r a c t i o n o f the two  competing c e n t r e s i s a p p r o x i m a t e l y  But i n d e n s e l y p o p u l a t e d urban a r e a s , t h e r e may  equal.  be many c e n t r e s  a t t r a c t i n g the consumer w i t h i n the d i s t a n c e t h a t the consumer i s  D. L. Thompson, A n a l y s i s o f R e t a i l i n g P o t e n t i a l i n M e t r o p o l i t a n A r e a s , U n i v e r s i t y o f C a l i f o r n i a P r e s s , B e r k e l y , 1964, p. 6.  149  w i l l i n g to travel.  None o f t h e s e c e n t r e s have r i g i d l y  trade area boundaries. siderably.  Rather, the trade areas overlap  defined con-  The b r e a k i n g p o i n t concept l o s e s i t s u s e f u l n e s s  i n t h i s s i t u a t i o n i f t h e o b j e c t o f the a n a l y s i s i s t o d e t e r m i n e not which one o f two competing c e n t r e s a consumer w i l l but which ones ( o f t h e many) he w i l l l i k e l y than the o t h e r s .  patronize  p a t r o n i z e more o f t e n  I n t h i s s e t t i n g t h e consumer does n o t a c t i n a  d e t e r m i n i s t i c manner - he does n o t always v i s i t a c e r t a i n c e n t r e because he happens t o r e s i d e w i t h i n t h e b r e a k i n g p o i n t (trade area).  R a t h e r , he w i l l l i k e l y  or probably  perimeter  act i n a certain  f a s h i o n , i n w h i c h case h i s b e h a v i o u r i s dependent on t h e number of a l t e r n a t i v e s a v a i l a b l e t o him and h i s p e r c e p t i o n as t o t h e b e n e f i t s and c o s t s a s s o c i a t e d w i t h each a l t e r n a t i v e . T h i s beh a v i o u r can be d e s c r i b e d and p r e d i c t e d i n p r o b a b i l i s t i c terms. T h i s i s t h e concern o f p r o b a b i l i t y a n a l y s i s , a s u b j e c t t o w h i c h the remainder o f t h i s c h a p t e r i s d i r e c t e d . P r o b a b i l i s t i c Models The g r a v i m e t r i c models d i s c u s s e d i n t h e p r e c e d i n g t i o n a r e a l l macro-models.  sec-  The consumer b e h a v i o u r s t u d i e d i s  t r e a t e d i n a h i g h l y aggregated f a s h i o n , a t t h e r e g i o n a l o r inter-urban l e v e l . However, l o c a t i o n a n a l y s i s a t t h e i n t r a - u r b a n l e v e l i s concerned w i t h problems I n d e t e r m i n i n g  consumer b e h a v i o u r a t t h e  m i c r o - l e v e l , t h a t i s a t t h e l e v e l o f t h e i n d i v i d u a l f i r m s and consumers where I n d i v i d u a l d e c i s i o n s a r e c o n d i t i o n e d by l o c a l stances.  Since R e i l l y * s i n i t i a l  circum-  c o n t r i b u t i o n , the notion of a  s i n g l e downtown shopping core has been superseded by a n o t i o n o f  150 many a l t e r n a t e c e n t r e s o f r e t a i l a c t i v i t y , the most i m p o r t a n t w h i c h are planned  shopping c e n t r e s .  of  These c e n t r e s do n o t enjoy  an  e x c l u s i v e l y c a p t i v e t r a d e a r e a but r a t h e r e x e r t a t r a d e i n f l u e n c e which o v e r l a p s t h a t o f o t h e r a l t e r n a t e c e n t r e s . The i m p o r t a n t q u e s t i o n s i n p l a n n i n g the development o f one o f t h e s e c e n t r e s would be i n r e g a r d t o where the c e n t r e s h o u l d be l o c a t e d , how  l a r g e i t should be, and how  i t should be  struc-  t u r e d i n terms o f t e n a n t mix t o b e s t s u i t the market which i t w i l l serve. I n a t t e m p t i n g t o p r o v i d e answers t o such q u e s t i o n s , R e i l l y ' s l a w has been a p p l i e d ( w i t h m o d i f i c a t i o n s ) t o e s t i m a t e t r a d e areas o f proposed shopping urban).  centres w i t h i n c i t i e s  (intra-  As an example, g i v e n a proposed s i t e f o r a shopping  centre,  competing c e n t r e s a r e n o t e d , t h e i r p r o x i m i t y t o the s u b j e c t s i t e i s p l o t t e d , and t h e i r s i z e i s d e t e r m i n e d .  Then, u s i n g the modi-  f i e d g r a v i t y model, the b r e a k i n g p o i n t s between the e x i s t i n g c e n t r e s and t h e proposed c e n t r e are c a l c u l a t e d , and a p o t e n t i a l t r a d i n g a r e a f o r the proposed c e n t r e I s d e l i n e a t e d . w i t h i n the d e l i m i t e d a r e a i s determined  The p o p u l a t i o n  which p r o v i d e s the b a s i s  f o r c a l c u l a t i n g the p o t e n t i a l r e t a i l e x p e n d i t u r e of t h i s a r e a , and u l t i m a t e l y , the p r o p o r t i o n o f t h i s p o t e n t i a l which i s l i k e l y t o a c c r u e t o the new  centre i n sales.  The m o d i f i c a t i o n s a p p l i e d t o R e i l l y ' s law i n v o l v e changes i n the f a c t o r s chosen as measures o f a t t r a c t i v e and forces.  resistant  The square f o o t a g e o f r e t a i l space has been s u b s t i t u t e d  f o r p o p u l a t i o n , and d r i v i n g times s u b s t i t u t e d f o r p h y s i c a l d i s tance i n m i l e s .  I t can be argued t h a t square f o o t a g e o f space i s  a good measure o f a t t r a c t i v e power s i n c e i t r e a l l y r e p r e s e n t s the number of i t e m s c a r r i e d by the c e n t r e , and t h i s i s what m a i n l y  151  a t t r a c t s t h e consumer.  That i s , i t i s t h e b r e a d t h and depth o f  the p r o d u c t a s s o r t m e n t o f f e r e d a t a p a r t i c u l a r c e n t r e which i s the a t t r a c t i o n o f t h a t c e n t r e - and t h e square f o o t a g e  isa  r e p r e s e n t a t i v e measure o f t h a t a t t r a c t i v e power s i n c e b r e a d t h and depth o f s e l e c t i o n are r o u g h l y  correlated to t h e s i z e of the  centre; the l a r g e r the centre, the greater the s e l e c t i o n .  Pre-  sumably, t h e g r e a t e r number o f i t e m s c a r r i e d by a p a r t i c u l a r shopping c e n t r e , t h e g r e a t e r i s t h e consumer's e x p e c t a t i o n a shopping t r i p t o t h a t c e n t r e w i l l be s u c c e s s f u l .  that  I t i s thus  assumed t h a t t h e consumer's degree o f e x p e c t a t i o n o r r e l a t i v e subjective p r o b a b i l i t y of achieving s a t i s f a c t i o n i s d i r e c t l y p r o p o r t i o n a l t o t h e number o f i t e m s o f f e r e d .  But s i n c e i t i s  d i f f i c u l t t o measure t h e number o f i t e m s , i t i s assumed t h a t square footage  o f s e l l i n g a r e a can be s u b s t i t u t e d as an  approximately  r e p r e s e n t a t i v e measure o f a t t r a c t i v e power. S i m i l a r l y i t can be argued t h a t r e s i s t a n t f o r c e s a r e p r e s e n t which l e s s e n t h e l i k e l i h o o d o f a consumer v i s i t i n g t h e shopping c e n t r e .  The e f f o r t , t i m e , d i s t a n c e t o t r a v e l , and c o s t  i n v o l v e d i n making t h e t r i p a r e p e r c e i v e d  by t h e consumer as de-  t r a c t i v e aspects of v i s i t i n g the centre.  The l i k e l i h o o d t h a t a  consumer w i l l make t h e t r i p i s n e g a t i v e l y i n f l u e n c e d by t h e s e r e s i s t a n t f a c t o r s , o r i n o t h e r words, i n v e r s e l y p r o p o r t i o n a l t o t h e s e " c o s t s " as p e r c e i v e d  by t h e consumer.  I t can be argued t h a t as d i s t a n c e from t h e c e n t r e i n c r e a s e s , t h e l i k e l i h o o d o f t h e consumer v i s i t i n g t h e c e n t r e d e c l i n e s even more r a p i d l y i n view o f h i s p e r c e p t i o n o f t h e r i s i n g " c o s t s " o f making t h e t r i p  ("costs" i n t h i s context r e f e r  t o any and a l l c o s t s p e r c e i v e d by t h e consumer i n c l u d i n g money,  152 t i m e , e f f o r t , and i r r i t a t i o n s ) .  T h i s f a c e t o f consumer b e h a v i o u r  i s d e s c r i b e d i n g r a v i m e t r i c models by an e x p o n e n t i a l f u n c t i o n which i s intended  t o account f o r t h e o b s e r v a t i o n t h a t t h e l i k e l i h o o d o f  t h e consumer v i s i t i n g  t h e c e n t r e d e c l i n e s i n some i n v e r s e  p o r t i o n t o t h e c o s t s i n v o l v e d i n making t h e t r i p .  pro-  That t h e expo-  n e n t i a l v a l u e s chosen f o r use i n most g r a v i m e t r i c models have a v a l u e h i g h e r t h a n one i s i n d i c a t i v e o f t h e o b s e r v a t i o n t h a t t h e l i k e l i h o o d o f a shopping v i s i t d e c l i n e s a t a f a s t e r r a t e than the r a t e a t w h i c h c o s t s o f making t h a t t r i p i n c r e a s e . a d d i t i o n a l i n c r e m e n t i n c o s t produces a c o r r e s p o n d i n g l y negative trip.  Bach greater  e f f e c t on t h e l i k e l i h o o d t h a t t h e consumer w i l l make t h e  D i s t a n c e h a s been s u b s t i t u t e d as a p r o x y v a r i a b l e f o r  c o s t s , b u t i t i s n o t r e a l l y t h e p h y s i c a l d i s t a n c e which i s r e l e v a n t i n t h e contemporary c o n g e s t e d - t r a f f i c scene, b u t r a t h e r d i s t a n c e as measured i n time u n i t s .  T i m e - d i s t a n c e i s thought t o be  a r e p r e s e n t a t i v e measure o f t h e r e s i s t a n t f o r c e s ( o r c o s t s ) negat i v e l y i n f l u e n c i n g t h e consumer's d e c i s i o n t o u n d e r t a k e t h e shopping  trip. S u b s t i t u t i n g t r a v e l time and s t o r e a r e a i n t o R e i l l y * s  l a w e n a b l e s t h e a n a l y s t t o d e t e r m i n e b r e a k i n g p o i n t s between c e n t r e s , and by j o i n i n g t h e s e p o i n t s , t h e t r a d e a r e a can t h e n be delineated. There a r e s e v e r a l drawbacks t o t h i s approach.  The l a w  d e f i n e s t h e b r e a k i n g p o i n t as t h a t p o i n t a t which r e t a i l t r a d e i s e q u a l l y d i v i d e d between t h e two c e n t r e s .  I n e f f e c t t h i s i s the  p o i n t where t h e l i k e l i h o o d o r p r o b a b i l i t y o f a consumer e i t h e r c e n t r e i s 0.5.  To t e r m i n a t e  choosing  a centre's r e t a i l trade  area  a t t h e b r e a k i n g p o i n t i s t o e x c l u d e those consumers whose p r o b a b i l i t y  153  o f v i s i t i n g the s u b j e c t c e n t r e I s l e s s than 0.5.  I t appears un-  r e a s o n a b l e t o d e l i m i t the t r a d i n g a r e a a t the b r e a k i n g p o i n t . Furthermore the model seems t o assume t h a t shoppers o n l y choose between the two a l t e r n a t i v e c e n t r e s n e a r e s t t o t h e i r p l a c e o f residence.  I n f a c t , consumers n o r m a l l y do have a much b r o a d e r  l a t i t u d e o f c h o i c e and do n o t r e s t r i c t themselves  to only  two  a l t e r n a t i v e c e n t r e s , but i n s t e a d choose from among s e v e r a l a l t e r n a t i v e s a c c o r d i n g t o v a r i o u s a t t r a c t i v e and r e s i s t a n t f a c t o r s . H u f f has q u e s t i o n e d the assumption t h a t the exponent o f the d i s t a n c e f a c t o r which R e i l l y had o r i g i n a l l y e s t i m a t e d as for  2.0  i n t e r - u r b a n t r a d e movements s h o u l d a l s o a p p l y t o i n t r a - u r b a n  t r a d e movements.  He f i n d s t h i s p a r t i c u l a r l y q u e s t i o n a b l e i n view  o f R e i l l y ' s e m p i r i c a l f i n d i n g s which showed a broad range o f 25 v a l u e s f o r t h i s parameter. s t u d i e s (mentioned  F u r t h e r m o r e he n o t e s t h a t o t h e r  i n the p r e c e d i n g s e c t i o n ) have shown t h a t the  d i s t a n c e exponent has ranged from 1.5  t o over 3 depending on the  type o f t r i p , the g e o g r a p h i c a l s e t t i n g , and the r e l a t i v e 26  sizes  o f competing c e n t r e s . H u f f ' s Model In view o f the l i m i t a t i o n s o f the g r a v i m e t r i c models d i s c u s s e d above, H u f f developed and t e s t e d a model which he b e l i e v e d overcame some o f t h e s e l i m i t a t i o n s . I n h i s words: The model p r o v i d e s a t e n t a t i v e o p e r a t i o n a l b a s i s f o r u n d e r s t a n d i n g and d e t e r m i n i n g the r e t a i l t r a d e a r e a o f a shopping c e n t r e . The B. L. H u f f , "A Note on the L i m i t a t i o n s i n I n t r a - U r b a n G r a v i t y M o d e l s , " Land Economics, F e b r u a r y , 1961, pp. 64 - 66. 26 I b i d . , p. 65. 3  154 r e t a i l t r a d e a r e a o f an e x i s t i n g o r proposed shopping c e n t r e can he a s c e r t a i n e d by: (1) d i v i d i n g the s u r r o u n d i n g a r e a i n t o s m a l l s t a t i s t i c a l u n i t s ; (2) c a l c u l a t i n g the p r o b a b i l i t y o f consumers from each o f t h e s e u n i t s g o i n g t o a p a r t i c u l a r shopping c e n t r e ; and (3) drawing l i n e s c o n n e c t i n g a l l s t a t i s t i c a l u n i t s having l i k e p r o b a b i l i t i e s . A r e t a i l t r a d e a r e a i s thus n o t a f i x e d l i n e c i r c u m s c r i b i n g a shopping c e n t r e , but r a t h e r a s e r i e s of zonal p r o b a b i l i t y contours. ' 2  H u f f ' s model i s a p r o b a b i l i s t i c model o f i n t r a - u r b a n r e t a i l t r a d e t r a n s a c t i o n s and i s termed a " p r o b a b i l i s t i c model o f  28 consumer s p a t i a l b e h a v i o u r . "  I t i s r e l a t e d to a s e r i e s of  models a l l known as g r a v i m e t r i c models.  T h i s p a r t i c u l a r model  u s e s d i s t a n c e i n time u n i t s and s t o r e a r e a as i t s major v a r i a b l e s and i n c l u d e s an e x p o n e n t i a l p a r a m e t e r , t h e v a l u e o f which must be e s t i m a t e d from e m p i r i c a l d a t a .  The v a l u e s o f t h i s parameter  appear t o v a r y s i g n i f i c a n t l y depending upon the type o f t r i p b e i n g c o n s i d e r e d by the consumer. i s i n t u r n determined  shopping  The type o f shopping  trip  by the p a r t i c u l a r type o f merchandise sought  by the consumer. H u f f ' s model i s b a s i c a l l y f o r m u l a t e d as a t h e o r e t i c a l a b s t r a c t i o n o f the f a c t o r s g o v e r n i n g consumer s p a t i a l I t i s designed i n such a way  behaviour.  t h a t the r e l a t i o n s h i p s between t h e s e  f a c t o r s produce a p r o b a b i l i t y e s t i m a t e o f expected h a v i o u r i f the f a c t o r s are g i v e n c e r t a i n v a l u e s .  consumer beThe  probability  t h a t a consumer w i l l make a p a r t i c u l a r s p a t i a l c h o i c e i s dependent upon h i s p e r c e p t i o n o f the u t i l i t y o f making t h a t c h o i c e , w i t h 27 D. L. H u f f , D e t e r m i n a t i o n o f I n t r a - U r b a n R e t a i l Trade A r e a s , U n i v e r s i t y o f C a l i f o r n i a , Graduate School o f B u s i n e s s A d m i n i s t r a t i o n , Los A n g e l e s , 1962, p. 5. 2 8  I b i d . , pp. 4 -  5.  155 u t i l i t y i n t h i s sense p r i m a r i l y i n t e n d e d o f t h e amount o f s a t i s f a c t i o n d e r i v e d deriving  as a s u b j e c t i v e measure  compared w i t h the c o s t o f  i t . The g r e a t e r the u t i l i t y o f a c e r t a i n c h o i c e ,  g r e a t e r the p r o b a b i l i t y t h a t t h a t p a r t i c u l a r c h o i c e w i l l made.  A l l t h i s says b a s i c a l l y i s what was  n e c t i o n w i t h R e i l l y ' s g r a v i t y model:  s a i d e a r l i e r i n con-  t o the  attractions  o f f e r e d by t h a t f a c i l i t y weighed a g a i n s t the c o s t s of t h a t i s , the consumer w i l l  a l t e r n a t i v e according  be  t h a t a p a r t i c u l a r shopping  f a c i l i t y w i l l a t t r a c t customers a c c o r d i n g  that f a c i l i t y ;  the  visiting  choose a p a r t i c u l a r  t o a s u b j e c t i v e b e n e f i t - c o s t a n a l y s i s of  that alternative. H u f f b e l i e v e s t h a t the p r i m a r y f a c t o r s which d e t e r m i n e the p r o b a b i l i t y o f a d e c i s i o n t o shop a t a f a c i l i t y o f the shopping c e n t r e and  the d i s t a n c e i n time u n i t s from  consumer's t r a v e l base t o t h a t c e n t r e . conditional  are the  on an e x p o n e n t i a l  size the  The d i s t a n c e f a c t o r i s  p a r a m e t e r , lambda.  The  probability  t h a t a consumer a t / w i l l go t o a p a r t i c u l a r r e t a i l f a c i l i t y j  is  d e f i n e d i n the model;  The parameter 3\  i s t o be e s t i m a t e d  e m p i r i c a l l y t o r e f l e c t the  e f f e c t o f t r a v e l time on v a r i o u s k i n d s o f shopping t r i p s , as p r e v i o u s l y mentioned, H u f f d i d not b e l i e v e t h i s v a l u e  since should  be 2 i n e v e r y c a s e . The number of consumers a t a g i v e n p l a c e i shop a t a p a r t i c u l a r j at i  and  i s p r o p o r t i o n a l t o the number o f consumers  t o the p r o b a b i l i t y t h a t a consumer a t < w i l l  f o r shopping.  expected t o  select  j  156  E (C i )j - Pr y t  where E {Gi)j  x  C;  - the expected number o f consumers a t L  a shopping f a c i l i t y J  choosing  ; and C i = the numher o f consumers a t i .  E s t i m a t i o n o f a s a l e s volume p o t e n t i a l f o r a proposed shopping  c e n t r e i s accomplished  p r o c e d i n g through the f o l l o w i n g  w i t h the use o f H u f f ' s model by s e q u e n t i a l s t e p s ( a l l o f which  H u f f has i n c l u d e d i n a computer program f o r ease and speed of 29 computation): Step 1)  Determine the p r o b a b i l i t y o f shoppers p a t r o n i z i n g proposed c e n t r e by the f o l l o w i n g  -  Tij  n  the  equation:  ml  where P t j = the p r o b a b i l i t y P o f a consumer o r i g i n a t i n g a t a g i v e n p o i n t i shopping l o c a t i o n j' \ Sj  at a p a r t i c u l a r  retail  - the s i z e o f the r e t a i l l o c a t i o n j  ( i n square f e e t ) ; T£j  = the d i s t a n c e T ( e x p r e s s e d i n  terms o f p h y s i c a l d i s t a n c e o r t i m e - d i s t a n c e ) s e p a r a t i n g i and j  ; J*. = a parameter which i s t o be  estimated  e m p i r i c a l l y t o r e f l e c t the s e n s i t i v i t y of v a r i o u s k i n d s o f shopping  t r i p s t o d i s t a n c e ( t h e parameter i s e i t h e r  d e r i v e d through a s e a r c h procedure  based on d a t a  collected  f o r the proposed l o c a t i o n , o r i s s i m p l y s p e c i f i e d based on p r e v i o u s f i n d i n g s ) ;  m  - number o f r e t a i l  locations.  D. L. H u f f , A Programmed S o l u t i o n f o r E s t i m a t i n g R e t a i l S a l e s P o t e n t i a l s , Centre f o r R e g i o n a l S t u d i e s , Lawrence, Kansas, 1966.  157 Step 2)  E s t i m a t e t h e number o f expected consumers p a t r o n i z i n g j from a p a r t i c u l a r I : E//  =  Tij  x  C<  where T$ij = t h e expected number o f consumers C a t i who w i l l Step 3)  shop a t j :  C a l c u l a t e t h e expected annual s a l e s from each I : =  kj t  where A^y  Ezy  x  B<-*  = t h e expected annual s a l e s A o r i g i n a t i n g  a t i and t e r m i n a t i n g a t j ; and  = t h e average  a n n u a l amount B spent by consumers a t i f o r each c l a s s o f goods K • Step 4)  C a l c u l a t e t h e t o t a l expected number o f consumers from a l l points i patronizing j :  TEj  =  ?  t-i  B  /7  where T E j = t o t a l expected number o f consumers from a l l p o i n t s i shopping a t j ; w U/ Step 5)  «2  = number o f s t a t i s t i c a l  * 3 ) ;  z  C a l c u l a t e t o t a l expected volume o f s a l e s from a l l c at  j  : m  TA /  =  71  Ai)  where T A j = t o t a l expected volume o f s a l e s from a l l of the 1 areas terminating a t y Step 6)  The f i r s t r u n o f t h e above s t e p s r e q u i r e s t h a t an assumption be made as t o t h e s i z e o f t h e proposed facility.  T h i s assumed s i z e i s t h e n used i n t h e  areas  158 c a l c u l a t i o n i n step ( 1 ) , which o f course governs t h e c a l c u l a t e d r e s u l t s o f the next f o u r steps.  The r e s u l t  o b t a i n e d from s t e p (5) i s t h e r e f o r e t h e volume p o t e n t i a l e s t i m a t e a s s o c i a t e d w i t h an assumed ( g i v e n ) s i z e o f t h e proposed f a c i l i t y .  But, l o c a t i o n a n a l y s i s should  pro-  v i d e g u i d e l i n e s r e g a r d i n g what s i z e t h e proposed s h o u l d be o p t i m a l l y .  To a c c o m p l i s h  f o l l o w i n g steps are necessary:  facility  t h i s g o a l , the  re-run the f i r s t  five  steps using a d i f f e r e n t , i n c r e m e n t a l l y l a r g e r s i z e assumption up t o a g i v e n maximum.  These r e - c a l c u l a t i o n s  w i l l p r o v i d e s a l e s volume e s t i m a t e s f o r each I n c r e m e n t a l l y larger facility Step 7)  size.  The m a r g i n on s a l e s , o p e r a t i n g expenses and o p e r a t i n g p r o f i t (expressed as a p e r c e n t a g e o f s a l e s ) a r e assumed t o be a function of a r e t a i l f a c i l i t y ' s s i z e . G e n e r a l l y , the l a r g e r the s i z e of the f a c i l i t y , t h e l a r g e r w i l l be i t s operat i n g p r o f i t p e r c e n t a g e because o f economies o f s c a l e . However, a p o i n t i s f i n a l l y reached where d i s e c o n o m i e s o f s c a l e come i n t o e f f e c t t h a t tend t o ^ reduce t h e o p e r a t i n g p r o f i t p e r c e n t a g e .  0  The p r e c i s e r e l a t i o n s h i p between t h e o p e r a t i n g p r o f i t and t h e v a r i o u s s i z e s o f a f a c i l i t y must be determined e m p i r i c a l l y , t h e r e s u l t b e i n g an o p e r a t i n g p r o f i t p e r centage a s s o c i a t e d w i t h each p o s s i b l e s i z e .  The p r o -  cedure i s then t o c a l c u l a t e t h e n e t o p e r a t i n g p r o f i t a s s o c i a t e d w i t h each o f t h e assumed s i z e l e v e l s s p e c i f i e d i n step (1) by m u l t i p l y i n g t h e expected  sales  volume e s t i m a t e f o r each s i z e by t h e o p e r a t i n g p r o f i t  I b i d . , p. 10  159  p e r c e n t a g e ( e x p r e s s e d as a p e r c e n t a g e o f s a l e s ) f o r each s i z e .  The r e s u l t i s an o p e r a t i n g p r o f i t e s t i m a t e  f o r each assumed s i z e . the l a r g e s t  The f i n a l s t e p i s t o s i n g l e o u t  o p e r a t i n g p r o f i t from t h e s p e c i f i e d  l e v e l s f o r t h e proposed f a c i l i t y .  size  The r e s u l t i s t h e  optimum s i z e f o r t h e f a c i l i t y . Although  a t f i r s t g l a n c e t h e s e q u e n t i a l method d e s c r i b e d  above appears t o have c o n s i d e r a b l e a p p e a l , i t w i l l be shown l a t e r that considerable d i f f i c u l t i e s are evident i n applying t h i s approach, d i f f i c u l t i e s which shed doubt on t h e a b i l i t y o f t h i s method t o produce a v a l i d e s t i m a t e o f both t h e optimum s i z e f o r the proposed f a c i l i t y , and a l s o t h e c o r r e s p o n d i n g p o t e n t i a l volume w h i c h c o u l d be expected  sales  f o r t h a t p a r t i c u l a r optimum s i z e .  But b e f o r e d i s c u s s i n g t h e adequacy o f t h i s model, and b e f o r e a n a l y z i n g t h e d i f f i c u l t i e s encountered i n a p p l y i n g p r o b a b i l i s t i c models o f t h i s type t h e d i s c u s s i o n t u r n s t o a b r i e f l o o k a t a p r o b a b i l i s t i c model s i m i l a r t o H u f f ' s w h i c h was p r e s e n t e d  f o r the  use o f c i v i c p l a n n i n g a g e n c i e s i n d e a l i n g w i t h r e t a i l p l a n n i n g p o l i c y and p r o b l e m s . Lakshmanan and Hansen Lakshmanan and Hansen have produced a model which they f e e l p r o v i d e s a means o f measuring r e t a i l market p o t e n t i a l . E s s e n t i a l l y t h e same as H u f f ' s model, i t i s i n t e n d e d as an a i d t o p l a n n i n g d e c i s i o n s e s p e c i a l l y those o f l o c a l government p l a n n i n g boards.  As such i t s emphasis i s n o t so much on d e l i n e a t i n g t h e  t r a d e a r e a o f a p a r t i c u l a r c e n t r e as i t i s on p r e d i c t i n g  the sales  volume p o t e n t i a l f o r proposed r e t a i l f a c i l i t i e s , o r t h e market p o t e n t i a l t h a t e x i s t s f o r new c e n t r e s i n a g i v e n a r e a where  160 competitive  f a c i l i t i e s already e x i s t .  I t i s a l s o used t o p r e d i c t  f u t u r e r e t a i l f l o o r space r e q u i r e m e n t s based on expected of p o p u l a t i o n  and  patterns  income growth i n the f u t u r e .  The model b e g i n s w i t h the premise t h a t the s i z e and number o f r e t a i l  establishments  i n an a r e a i s a f u n c t i o n of  number o f consumers, o r more a p p r o p r i a t e l y , t h e i r  the  purchasing  power. The p r e s e n t f o r m u l a t i o n a s s e r t s t h a t the l o c a t i o n or s a l e s p o t e n t i a l of a r e t a i l c e n t r e i s not t o be yiewed as a f u n c t i o n o f the p u r c h a s i n g power o f an a r b i t r a r y s p a t i a l s l i c e o f the r e g i o n . More r e a l i s t i c a l l y , i t describes a s i t u a t i o n o f o v e r l a p p i n g c o m p e t i t i o n between shopping c e n t r e s and d e v e l o p s a,mathematlcal framework f o r measuring i t . E s s e n t i a l l y , the model s t a t e s t h a t the s a l e s p o t e n t i a l for  a r e t a i l f a c i l i t y i s d i r e c t l y r e l a t e d to i t s s i z e .  Further,  t h i s s a l e s p o t e n t i a l i s d i r e c t l y r e l a t e d to i t s p r o x i m i t y to a number of consumers and  t h e i r income l e v e l .  p o t e n t i a l o f a c e n t r e i s r e l a t e d t o how retail facilities.  F i n a l l y , the  i t i s disposed  sales  to competing  These r e l a t i o n s h i p s a r e e x p r e s s e d i n the  m a t h e m a t i c a l form of t h e f a m i l i a r g r a v i t y framework:  Sij  =  Q  T. R. Lakshmanan and ¥. G. Hansen, "A R e t a i l Market P o t e n t i a l M o d e l , " J o u r n a l of the American I n s t i t u t e o f P l a n n e r s , Volume 31, September, 1965, p. 135.  161 where S ij - consumer r e t a i l e x p e n d i t u r e s zone i spent a t l o c a t i o n j  0i  = t o t a l consumer r e t a i l  t u r e s o f t h e p o p u l a t i o n i n zone L ; ¥J activity i n location j  of the population i n expendi-  = the s i z e of the r e t a i l  ; A- = an exponent a p p l i e d t o t h e d i s -  tance v a r i a b l e . The above model a s s e r t s t h a t the r e t a i l c e n t r e a t j a t t r a c t s consumer d o l l a r s (S i j ) A)  i n d i r e c t p r o p o r t i o n t o the consumer expenditures,  Oi  ,  B)  i n d i r e c t proportion to i t s s i z e P j  C)  i n inverse proportion to distance to the consumers (dcj  D)  X  ,  ), and  i n inverse proportion to competition  The t o t a l s a l e s i n r e t a i l  where Sj  - total retail  c e n t r e F/  i s expressed:  sales i n r e t a i l centre P j .  The s i m i l a r i t y t o H u f f ' s model i s e v i d e n t .  Without  d i s c l o s i n g t h e e m p i r i c a l t e s t r e s u l t s , Lakshmanan and Hansen s t a t e d t h a t t h e model showed a good f i t between model-generated a n n u a l s a l e s and a c t u a l annual s a l e s i n the B a l t i m o r e  region.  162  Lakshmanan and Hansen approach t h e q u e s t i o n  of the  optimum s i z e f o r t h e proposed c e n t r e somewhat d i f f e r e n t l y from Huff.  They "believed t h a t a l o c a t i o n a l d e c i s i o n i s made by a  d e v e l o p e r when a minimum expected r e t u r n i s e s t i m a t e d  at a par-  t i c u l a r l o c a t i o n r e l a t i v e t o r e t u r n s a v a i l a b l e a t known a l t e r n a tive locations. developers before  A c e r t a i n minimum i s c o n s i d e r e d  n e c e s s a r y by  t h e d e c i s i o n t o l o c a t e i s made.  Lakshmanan and  Hansen d e f i n e t h i s minimum i n terms o f annual s a l e s p e r square foot.  U s i n g f i g u r e s d e r i v e d from an Urban Land I n s t i t u t e p u b l i c a 32  tion,  t h e s t u d y assumed t h a t new shopping goods f a c i l i t i e s were  v i a b l e when t h e s a l e s p e r square f o o t o b t a i n e d were a t l e a s t $50 - $ 5 5 . ^  from t h e model r u n  When t h e model i n d i c a t e d t h a t s a l e s  o f l e s s t h a n $50 p e r square f o o t would be a c h i e v e d a t a proposed l o c a t i o n , t h e s i z e - l e v e l assumed f o r t h e c e n t r e was reduced and the model r e - r u n u n t i l s a l e s p e r square f o o t exceeded t h e a c c e p t a b l e d e f i n e d minimum.  T h i s method i s c o n t r a s t e d  to t h a t of Huff  where optimum s i z e was chosen by s e l e c t i n g t h e s i z e a t which t h e o p e r a t i n g p r o f i t would be m a x i m i z e d . As was s t a t e d p r e v i o u s l y , t h e model was i n t e n d e d m a r i l y as a t o o l t o a i d i n t h e development o f p l a n n i n g i n an u r b a n a r e a - e s p e c i a l l y t h e r e t a i l area.  To a c h i e v e an e s t i m a t e  pri-  objectives  requirements of that  of the r e t a i l  facilities  required  to adequately serve a p a r t i c u l a r area, the f o l l o w i n g r a t i o n a l e was s u g g e s t e d : 32  The D o l l a r s and Cents o f Shopping C e n t r e s : Land I n s t i t u t e , Washington, D.C., 19o9. 33 Lakshmanan and Hansen, op. c i t . , p. 139.  1969, Urban  163  f i r s t the s a l e s per square f o o t of shopping c e n t r e s . . . ( w e r e e s t i m a t e d by t h e model and) were aggregated by t r a n s p o r t a t i o n d i s t r i c t s . The u n d e r l y i n g assumption i s t h a t i f a group o f shopping c e n t r e s i n a t r a n s p o r t a t i o n d i s t r i c t a c h i e v e v e r y h i g h s a l e s p e r square f o o t (say over $ 7 5 ) , consumers i n t h e s e and surrounding d i s t r i c t s are p o o r l y served. H i g h s a l e s p e r square f o o t i n such a r e a s would r e s u l t e i t h e r i n an i n c r e a s e i n the s i z e o f the c e n t r e s , o r i n the development 34 o f new s t o r e s nearby t o s e r v e the consumers. The u n d e r l y i n g p e r s p e c t i v e  s t r e s s e d by the a u t h o r s o f  t h i s model i s t h a t i t i s a t o o l by w h i c h the t o t a l aggregated retail  e x p e n d i t u r e s o f a r e g i o n are a l l o c a t e d among the s e t of  retail  f a c i l i t i e s assumed f o r c o n s i d e r a t i o n .  c e n t r e i s t o be c o n s i d e r e d , e x i s t i n g f a c i l i t i e s and  s a l e s a r e r e - a l l o c a t e d amongst the  o f i t s expected share o f the  consideratotal  I f i t s expected s a l e s (under a g i v e n  l e v e l assumption) are below the a c c e p t a b l e a l t e r e d and  proposed  the proposed development under  t i o n , p r o v i d i n g an e s t i m a t e a v a i l a b l e expenditure.  I f a new  the programme r e - r u n .  size-  minimum, the s i z e i s  I f the s i z e i s too s m a l l , t h e n  a l l f a c i l i t i e s would o b t a i n such h i g h s a l e s p e r square f o o t  that  new  If  competing f a c i l i t i e s would l i k e l y  be developed n e a r b y .  the s i z e were too l a r g e , the r e s u l t i n g s a l e s p e r square f o o t would be so low as t o d i s c o u r a g e the development of such a facility.  Therefore,  the s i z e o f the new  proposed f a c i l i t y i s  a l t e r e d i n s u c c e s s i v e runs of the model u n t i l  the r e s u l t a n t s a l e s  p e r square f o o t f a l l s w i t h i n the optimum range (optimum i n the sense o f b e i n g h i g h enough t o p e r m i t a p r o f i t a b l e o p e r a t i o n , n o t too h i g h so as t o i n d i c a t e the t h r e a t o f new  but  competitive  f a c i l i t i e s moving i n t o capture a share of the excess demand). 34  Ibid  p.  139.  164 S e v e r a l a d d i t i o n a l assumptions a r e i m p l i c i t i n the model d e s c r i b e d above.  F i r s t , the model i s run w i t h e x i s t i n g c e n t r e s as  the o n l y i n p u t s .  I f the r e s u l t i n g s a l e s p e r square f o o t e s t i m a t e s  a r e much above the minimum f e a s i b l e l e v e l i t i s assumed t h a t consumers a r e under-served  and the e x i s t i n g f a c i l i t i e s  The excess e x p e n d i t u r e i s then determineds;  a r e crowded.  i t i s then d i v i d e d  by the minimum p e r square f o o t f i g u r e to p r o v i d e an e s t i m a t e o f t h e number o f square f e e t o f new  r e t a i l f a c i l i t i e s which a r e  r e q u i r e d t o s e r v e the consumers o f t h a t r e g i o n ; the f i n a l s t e p i s to  then a l l o c a t e t h a t r e q u i r e d space t o a new  proposed l o c a t i o n  o r l o c a t i o n s , and t h e n r e - a l l o c a t e the t o t a l r e t a i l amongst a l l c e n t r e s .  expenditure  Because the chosen l o c a t i o n o c c u p i e s a  s p e c i f i c g e o g r a p h i c a l l o c a t i o n , the e f f e c t o f d i s t a n c e w i l l  modify  the e x p e c t a t i o n o f a l l excess s a l e s a c c r u i n g to t h a t l o c a t i o n . Therefore, successive approximations  o f the s i z e o f t h e  new  f a c i l i t y a r e r u n t h r o u g h the programme to a r r i v e a t the s i z e f o r the c e n t r e i n t h a t l o c a t i o n w h i c h w i l l a t t r a c t a s u f f i c i e n t s a l e s volume p e r square f o o t .  I f the proposed l o c a t i o n i s a "poor"  ( i n the sense t h a t the a r e a i s a l r e a d y a d e q u a t e l y  served  one  by  r e t a i l f a c i l i t i e s ) , no assumed s i z e w i l l be s u f f i c i e n t to  generate  adequate s a l e s to p e r m i t s a t i s f a c t o r y s a l e s p e r square f o o t .  On  the o t h e r hand, i f the a r e a i s u n d e r - s e r v i c e d , the model w i l l supposedly p r o v i d e (through a p r o c e s s o f s u c c e s s i v e approximat i o n s ) an e s t i m a t e o f the s i z e o f the proposed f a c i l i t y w i l l p r o v i d e i t w i t h an adequate s a l e s p o t e n t i a l .  I n summary,  the d e c i s i o n to b u i l d a c e n t r e on the proposed s i t e w i l l on t h e model's a b i l i t y t o determine  which  depend  a f e a s i b l e s i z e f o r the  f a c i l i t y which w i l l p e r m i t the model t o a l l o c a t e an adequate s a l e s p o t e n t i a l to i t .  165 A l t h o u g h t h i s model i s i n t e n d e d f o r a somewhat d i f f e r e n t a p p l i c a t i o n t h a n H u f f ' s model, i t employs the same formula.  mathematical  I n t h i s sense i t s u f f e r s from the same problems and  l i m i t a t i o n s as does H u f f ' s . m o d e l ,  namely, problems i n v o l v i n g  v a r i a b l e s and p a r a m e t e r s o f the p r o b a b i l i t y f o r m u l a .  the  It i s this  s u b j e c t t o w h i c h the remainder o f t h i s c h a p t e r i s p r i m a r i l y  con-  cerned. L i m i t a t i o n s of the P r o b a b i l i t y Models The p r o b a b i l i s t i c method d i f f e r s from t h e d e t e r m i n i s t i c ( d e f i n e d t r a d e a r e a ) method i n one e s s e n t i a l r e s p e c t .  The  deter-  m i n i s t i c method o u t l i n e s the t r a d e a r e a boundary and the e n c l o s e d p o p u l a t i o n , and t h e n e s t i m a t e s the p e r c e n t a g e w h i c h i s expected  of that p o p u l a t i o n  t o p a t r o n i z e t h e c e n t r e by a p p l y i n g a s u b j e c -  t i v e l y e s t i m a t e d market share p e r c e n t a g e  factor.  The  probabilistic  a p p r o a c h , however, a v o i d s p h y s i c a l l y d e f i n i n g the t r a d e a r e a  and  i n s t e a d e s t i m a t e s the l i k e l y t o t a l p a t r o n a g e by assuming l o w e r p r o b a b i l i t i e s o f p a t r o n a g e as d i s t a n c e from the c e n t r e i n c r e a s e s . The danger i n u s i n g p r o b a b i l i t y models i s t o assume t h a t because the model i s expressed mathematical  i n an a p p a r e n t l y r i g o r o u s  f o r m u l a , the r e s u l t s w i l l be more a c c u r a t e and  c i s e t h a n those e s t i m a t e d s u b j e c t i v e l y .  pre-  But i f t h e f o r m u l a  embodies g r o s s p r o x y v a r i a b l e s and i m p r e c i s e l y d e f i n e d exponents, t h e assumption t h a t the model can g e n e r a t e r e l i a b l y p r e d i c t i o n s o f b e h a v i o u r a l l on i t s own what n a i v e .  i s erroneous  accurate and some-  Y e t s t u d e n t s o f l o c a t i o n a n a l y s i s , impressed  apparent p r e c i s i o n o f m a t h e m a t i c a l  by  the  formulae, often f a l l i n t o  the  t r a p o f p l a c i n g complete c o n f i d e n c e i n t h e i r supposedly tive" predictions.  "objec-  The f o l l o w i n g d i s c u s s i o n i l l u s t r a t e s t h i s p o i n t .  166 I n a study conducted  i n Vancouver t o determine t h e  p o t e n t i a l s a l e s volume f o r a proposed r e g i o n a l shopping in this city,  J  centre  v a r i o u s p r o b a b i l i t i e s o f patronage were a s s i g n e d  a c c o r d i n g t o b o t h d i s t a n c e from t h e c e n t r e and t h e type o f merc h a n d i s e sought.  These e s t i m a t e s were adapted from t h e r e s u l t s 36  o f I r a Lowry's study i n P i t t s b u r g h  which p r o v i d e d  empirically  d e r i v e d p r o b a b i l i t i e s o f consumers t r a v e l l i n g v a r i o u s d i s t a n c e s t o purchase v a r i o u s t y p e s o f goods and s e r v i c e s .  I t was assumed  t h a t l o w r y ' s r e s u l t s c o u l d be a p p l i e d t o o t h e r t r a d e a r e a s , and any d i f f e r e n c e s i n t h e t r a d e a r e a c o n d i t i o n s c o u l d be r e c o g n i z e d by a d j u s t i n g Lowry's p r o b a b i l i t y e s t i m a t e s .  L o c a l access and  c o m p e t i t i v e f a c t o r s f o r example c o u l d be accounted adjusting the p r o b a b i l i t i e s .  f o r by  Markoff's adjusted p r o b a b i l i t y  e s t i m a t e s a r e shown i n Table I . L a t e r i n the study, Markoff c r i t i c i z e s a s t u d y conducted  some a s p e c t s o f  by a p r i v a t e c o n s u l t i n g f i r m , e s p e c i a l l y t h e  market share v a l u e s a s s i g n e d by t h e f i r m : Thus i f a f i g u r e o f 15 p e r cent were chosen r e p r e s e n t i n g t h e drawing power f o r some t y p e of good o r s e r v i c e w i t h i n t h e p r i m a r y a r e a o f i n f l u e n c e the inference i s that t h i s centre w i l l draw 15 p e r cent e q u a l l y from a l l s e c t o r s w i t h i n t h e p r i m a r y a r e a , whether one b l o c k o r t h r e e m i l e s d i s t a n t . L i t t l e o r no j u s t i f i c a t i o n i s provided f o r the f o l l o w i n g values.^'  35  P. G. M a r k o f f , An A p p l i c a t i o n o f a P r o b a b i l i s t i c Method f o r S t o r e L o c a t i o n , u n p u b l i s h e d B. Comm. g r a d u a t i n g essay, U n i v e r s i t y o f B.C., 1 $ 6 8 . I . S. Lowry, " L o c a t i o n P a r a m e t e r s i n t h e P i t t s b u r g h M a r k e t , " R e g i o n a l S c i e n c e A s s o c i a t i o n P a p e r s , Volume X, 1963, pp. 147 - 163. 3 6  M a r k o f f , op. c l t . , p. 76.  167  TABLE I P r o b a b i l i t i e s of P a t r o n a g e by D i s t a n c e and Type o f Merchandise  Merchandise Types  0-2  2-4  4-6  6-8  8-12  Pood  .50  .30  .20  .10  .02  .50  .30  .20  .10  .02  Appliances  .30  .20  .10  .05  .02  Other F u r n i t u r e , E q u i p t .  .30  .20  .10  .10  .02  Clothing  A5  .35  .30  .10  .05  Transportation  .15  .10  .05  .02  .01  Medical  .70  .30  .20  .10  .05  .65  .35  .25  .15  .05  Recreation  .12  .08  .05  .02  .01  Reading  .20  .15  .10  .05  .02  Smoking and A l c o h o l  .AO  .30  .15  .05  .02  Household  Personal  Source:  Operation  Care Care  P.G. M a r k o f f , An A p p l i c a t i o n o f a P r o b a b i l i s t i c Method f o r S t o r e L o c a t i o n , p. 72.  168  Markoff apparently intends to c r i t i c i z e the f a c t that t h i s f i r m was n o t r e c o g n i z i n g t h a t t h e p e r c e n t a g e  drawing power f a c t o r  v a r i e s w i t h d i s t a n c e , which on t h e s u r f a c e appears t o be a v a l i d criticism.  Y e t , I t i s l i k e l y t h a t the p r i v a t e f i r m d i d indeed  r e c o g n i z e t h i s f a c t , b u t merely  averaged t h e v a l u e s f o r d i f f e r e n t  goods over d i f f e r e n t d i s t a n c e s i n t o an average drawing power f o r the whole a r e a .  What i s p a r t i c u l a r l y i n t e r e s t i n g t o note however  i s t h a t M a r k o f f contends t h a t " l i t t l e o r no j u s t i f i c a t i o n " i s p r o v i d e d f o r t h e e h o i c e o f 15 p e r c e n t as t h e v a l u e o f t h e drawing power p e r c e n t a g e  f a c t o r , which i s a v a l i d c r i t i c i s m s i n c e no  e v i d e n c e i s p r e s e n t e d w h i c h says t h i s v a l u e c o u l d n o t be 20 p e r c e n t o r 27 p e r c e n t o r any o t h e r v a l u e .  And y e t , M a r k o f f ' s own  s t u d y p r o v i d e s c e r t a i n l y no b e t t e r j u s t i f i c a t i o n f o r t h e c h o i c e o f t h e p r o b a b i l i t y v a l u e s shown i n Table I except t o say t h a t they a r e " a d j u s t e d " (no j u s t i f y i n g evidence c i t e d ) v a l u e s based on Lowry's P i t t s b u r g h r e s u l t s , which i n themselves  cannot w i t h any  degree o f c o n f i d e n c e be a p p l i e d t o any t r a d e a r e a o t h e r than P i t t s b u r g h u n t i l f u r t h e r r e s e a r c h determines other l o c a t i o n s .  their validity i n  Thus M a r k o f f i s c r i t i c i z i n g t h e p r i v a t e r e s e a r c h  f i r m f o r e x a c t l y t h a t w h i c h i s t h e major l i m i t a t i o n o f h i s own study:  t h a t t h e r e i s no r e a l , p r o v e n j u s t i f i c a t i o n f o r c h o o s i n g  any one p a r t i c u l a r v a l u e , o r s e t s o f p a r t i c u l a r v a l u e s , as t h e "correct" values to use.  M a r k o f f i m p l i e s t h a t h i s own study I s  more o b j e c t i v e than t h e o t h e r s t u d y because he employs p r o b a b i l i t y v a l u e s r a t h e r than an e s t i m a t e d drawing power p e r c e n t a g e but h i s p r o b a b i l i t y v a l u e s a r e a l s o m e r e l y e s t i m a t e s . t h e y were d e r i v e d w i t h some attempt  factor Certainly  at o b j e c t i v i t y , but t h e i r  d e r i v a t i o n o c c u r r e d i n P i t t s b u r g h based on t h e b e h a v i o u r p a t t e r n s  169  and  influences prevalent  r e s u l t s d e r i v e d i n one  i n that l o c a t i o n .  To assume t h a t  the  e m p i r i c a l s i t u a t i o n are v a l i d i n another  e m p i r i c a l s i t u a t i o n i s somewhat presumptuous e s p e c i a l l y s i n c e the t h e o r e t i c a l e x p l a n a t i o n f o r the b e h a v i o u r i s s k e t c h y  at  best.  I t appears l o g i c a l t h a t the p r o b a b i l i t i e s d e r i v e d i n a p a r t i c u l a r e m p i r i c a l s i t u a t i o n are t o a l a r g e e x t e n t p e c u l i a r to t h a t t i o n , and  still  only  situa-  estimates.  To a p p l y p r o b a b i l i t y v a l u e s  (or exponential  values  for  t h a t m a t t e r ) to s i t u a t i o n s o t h e r than the ones from which t h e y were d e r i v e d r e q u i r e s t h a t they be a d j u s t e d a c c o u n t f o r d i f f e r e n t c i r c u m s t a n c e s and  s u b j e c t i v e l y to  i n f l u e n c e s i n the  new  s i t u a t i o n , w h i c h r e i t e r a t e s and r e i n f o r c e s the c o n t e n t i o n  that  a t the p r e s e n t s t a t e of the a r t o f model development, the use s u b j e c t i v e judgment cannot be a v o i d e d .  of  T h i s i s not meant t o  t h a t s u b j e c t i v e judgment i s a k i n t o a p l a g u e which should  imply  be  avoided at a l l c o s t s , f o r i n f a c t experienced a n a l y s t s are  often  c a p a b l e of s u b j e c t i v e l y a d j u s t i n g the d a t a w i t h good r e s u l t s . What i t does say i s t h a t the p r o b a b i l i s t i c models d i s c u s s e d  in  t h i s c h a p t e r r e q u i r e s u b j e c t i v e i n t e r p r e t a t i o n i f they a r e t o at a l l u s e f u l .  T h i s does not mean t h a t the models should  be  be dis-  carded f o r b e i n g i n a d e q u a t e to the t a s k o f p r o v i d i n g c o n s i s t e n t l y a c c u r a t e , p r e c i s e p r e d i c t i o n s a l l on t h e i r own.  C e r t a i n l y they  a r e not p e r f e c t , but the c o m p l e x i t i e s o f consumer s p a t i a l haviour  are such t h a t i t may  t o b u i l d the p e r f e c t model. recognized  be-  w e l l prove t o be an i m p o s s i b l e I n the meantime, i t should  task  be  t h a t the p r e s e n t l y a v a i l a b l e p r o b a b i l i s t i c models,  when a p p l i e d i n c o n j u n c t i o n w i t h s u b j e c t i v e Judgment and  experience,  a r e u s e f u l a n a l y t i c a l t o o l s f o r s a l e s volume e s t i m a t i n g i n s p i t e of t h e i r l i m i t a t i o n s .  The  t a s k remains to f u r t h e r extend  and  170 r e f i n e the models t o improve t h e i r d e s c r i p t i v e and capabilities.  predictive  T h i s w i l l r e q u i r e t h a t the models more e x p l i c i t l y  r e c o g n i z e the d e t e r m i n a n t s  of consumer s p a t i a l b e h a v i o u r ,  either  through expanding the number of v a r i a b l e s i n the f o r m u l a , o r through r e - s t r u c t u r i n g the  parameters.  To r e t u r n t o the s u b j e c t of H u f f ' s model, H u f f e m p i r i c a l l y t e s t e d h i s model i n a suburban Los Angeles determine  community to  the e x p o n e n t i a l d i s t a n c e parameter v a l u e s f o r h i s model,  The p r o c e d u r a l s t e p s I n t h i s e m p i r i c a l t e s t a r e expressed 1.  Assume a p a r t i c u l a r v a l u e of /N. w h i c h i s g r e a t e r than u n i t y . Correspondingly, s u b s t i t u t e the a p p r o p r i a t e values f o r each o f the a p p r o p r i a t e a l p h a b e t i c c h a r a c t e r s noted i n t h e model and c a l c u l a t e the expected p r o b a b i l i t i e s .  2.  Compare the expected p r o b a b i l i t i e s w i t h the a c t u a l r e l a t i v e f r e q u e n c i e s ( o f p a t r o n a g e ) o b t a i n e d from the s u r v e y d a t a and c a l c u l a t e a c o r r e l a t i o n c o e f f i c i e n t .  3.  Continue t o s u b s t i t u t e I n c r e m e n t a l values f o r u n t i l the h i g h e s t c o r r e l a t i o n c o e f f i c i e n t i s obtained which w i l l r e p r e s e n t the optimum v a l u e o f the parameter.3°  by Huff:  H u f f ' s e m p i r i c a l study o b t a i n e d d a t a samples from t h r e e neighbourhoods and f o u r t e e n planned  shopping  c e n t r e s , w i t h the  following results:  38 39  1.  F o r the commodity " c l o t h i n g , " the t h r e e neighbourhoods produced lambda v a l u e s of 2.655, 2.889 and 3.690.  2.  F o r " f u r n i t u r e , " the t h r e e n e i g h b o u r hoods produced lambda v a l u e s o f 2.115, 2.542, and 3.247.39  H u f f , D e t e r m i n a t i o n o f I n t r a - U r b a n R e t a i l Trade A r e a s , p. I b i d . , p.  27.  23.  171 H u f f commented on t h e r e s u l t s o f h i s t e s t : the expected b e h a v i o u r d e r i v e d from the model c o r r e s p o n d s q u i t e c l o s e l y t o t h e a c t u a l b e h a v i o u r observed from t h e survey f i n d i n g s . However, c o n t r a r y t o what was e x p e c t e d , t h e e s t i m a t e s o f lambda v a r i e d from neighbourhood t o neighbourhood the i n v e s t i g a t i o n was d e s i g n e d i n such a manner as t o t e s t t h e h y p o t h e s i s t h a t lambda was p r i m a r i l y a f u n c t i o n o f t h e type o f shopping t r i p . Each o f t h e t h r e e sample neighbourhoods were s e l e c t e d on t h e b a s i s o f t h e i r homogeneity, and i t was t h e r e f o r e expected t h a t lambda would be a p p r o x i m a t e l y t h e same f o r each neighbourhood w i t h r e s p e c t t o a g i v e n type o f shopping t r i p , i . e . , c l o t h i n g and f u r n i t u r e . 4 0  H u f f employed a s t a t i s t i c a l t e c h n i q u e t o determine whether o r n o t v a r i a t i o n s i n t h e e x p o n e n t i a l v a l u e s o b t a i n e d from t h e model were due t o sample v a r i a t i o n , and h a v i n g s a t i s f i e d hims e l f t h a t such v a r i a t i o n s were indeed a r e s u l t o f sample v a r i a t i o n , he c a l c u l a t e d a mean v a l u e o f lambda f o r each o f c l o t h i n g and 41 f u r n i t u r e , 3.191 and 2.723 r e s p e c t i v e l y . Huff concluded: Despite the l a c k of c o n c l u s i v e s t a t i s t i c a l evidence t h a t t h e mean lambda estimates are v a l i d representations o f t h e c l o t h i n g and f u r n i t u r e p a r a m e t e r s , t h e y do i n d i c a t e t h a t a consumer's s p a t i a l behaviour i s a f u n c t i o n of the t y p e o f shopping t r i p . F o r example, t h e mean e s t i m a t e s f o r shopping t r i p s i n v o l v i n g c l o t h i n g purchases i s h i g h e r than t h e mean v a l u e e s t i m a t e d f o r f u r n i t u r e p u r c h a s e s , which c o n f i r m s t h e o b s e r v a t i o n t h a t consumers a r e n o t w i l l i n g t o t r a v e l as f a r f o r c l o t h i n g as t h e y a r e f o r f u r n i t u r e p u r c h a s e s . 2  40 I b i d . , pp. 26 - 28. 4 1  42  I b i d . , p. 29. I b i d . , p. 31.  172 I n one study which t e s t e d H u f f ' s model,  negative  c o e f f i c i e n t s o f d e t e r m i n a t i o n were r e p o r t e d i n some c a s e s . who  Those  a r e accustomed t o d e a l i n g w i t h c o e f f i c i e n t s o f d e t e r m i n a t i o n p  as used i n r e g r e s s i o n a n a l y s i s know t h a t R But i f t h e sum  i s never n e g a t i v e .  of squared d e v i a t i o n s of e s t i m a t e d b e h a v i o u r from  a c t u a l b e h a v i o u r i s g r e a t e r than the sum  of squared d e v i a t i o n s 2 o f random b e h a v i o u r from a c t u a l b e h a v i o u r , R w i l l be n e g a t i v e . 2 I n some c a s e s , n e g a t i v e v a l u e s o f R o c c u r r e d over the whole range 44 o f lambda v a l u e s .  I n o t h e r words, the c o r r e l a t i o n between model  p r e d i c t i o n s and a c t u a l b e h a v i o u r was found t o be n e g a t i v e i n some cases.  W i g i n t o n concluded t h a t i n some cases the model d i d n o t  f i t the d a t a as w e l l as p u r e l y random b e h a v i o u r .  That i s , p r e d i c t e d  b e h a v i o u r d e v i a t e d from a c t u a l b e h a v i o u r more than randon b e h a v i o u r would have d e v i a t e d from the a c t u a l .  The model p r e d i c t e d b e h a v i o u r  whose r e l a t i o n s h i p t o a c t u a l b e h a v i o u r was worse than a p u r e l y random p a t t e r n .  W i g i n t o n b e l i e v e d t h a t t h i s c o u l d o n l y be t h e case  when the model m i s r e p r e s e n t e d the f a c t o r s which a c t u a l l y  determine  b e h a v i o u r , w h i c h l e d him t o b e l i e v e t h a t the model must be i n some v e r y fundamental  way,  incorrect  and p o s s i b l y s h o u l d be r e j e c t e d i n  i t s p r e s e n t form. W i g i n t o n a l s o r e - r a n H u f f ' s d a t a on a computer programme s e l e o t e d t o t e s t H u f f ' s model i n Vancouver. programme produced  A sub-routine of t h i s  graphs showing the b e h a v i o u r o f the c o r r e l a t i o n  43 c o e f f i c i e n t (R) w i t h i n c r e m e n t a l changes i n the v a l u e o f lambda 3. C. W i g i n t o n , An E m p i r i c a l Test o f a P r o b a b i l i s t i c Model o f Consumer S p a t i a l B e h a v i o u r , u n p u b l i s h e d MBA, t h e s i s . U n i v e r s i t y ; of B.C., 1966. 44 I b i d . , p. 109. 45 I b i d . , pp. 108 - 110.  173 o v e r t h e range f o r lambda o f 0.5  t o 4.5.  46  While Huff presented  the optimum v a l u e o f lambda f o r which t h e c o r r e l a t i o n  coefficient  was maximized, he d i d n o t s t r e s s whether o r not t h e r e was  a range  of lambda v a l u e s a l l e x h i b i t i n g h i g h c o e f f i c i e n t s o f c o r r e l a t i o n ; r a t h e r , he m e r e l y chose the p a r t i c u l a r lambda v a l u e which ted  t h e h i g h e s t c o r r e s p o n d i n g R.  when he reproduced  exhibi-  However, W i g i n t o n found t h a t  H u f f ' s r e s u l t s , "the model produced  consistently 47  h i g h v a l u e s o f R over a v e r y wide range of v a l u e s f o r lambda." He concluded t h a t not o n l y d i d H u f f ' s t e s t s f o r s i g n i f i c a n c e o f p a r t i c u l a r lambda v a l u e s seem q u e s t i o n a b l e , but a l s o the model  was  r e l a t i v e l y i n s e n s i t i v e t o v a l u e s of lambda over a v e r y wide range s i n c e the c o e f f i c i e n t s of c o r r e l a t i o n i n many cases remained above 0.9 w h i l e lambda ranged between 2.0  and 4.0.  Wiginton f e l t that  t h i s r e s u l t meant t h a t i n t h e model almost any v a l u e o f lambda o v e r a wide range would p r e d i c t about as w e l l as any o t h e r v a l u e , a c o n c l u s i o n which he b e l i e v e d r a i s e d s e r i o u s q u e s t i o n s about the v a l u e o f the model. W i g i n t o n was u n a b l e t o d e t e c t any d l s c e r n a b l e t r e n d s i n t h e c l u s t e r s of maximum lambda and R p a i r s generated from h i s d a t a and observed  t h a t a l t h o u g h maximum R v a l u e s tended t o i n c r e a s e w i t h  i n c r e a s i n g lambda v a l u e s , the s c a t t e r i n g o f generated v a l u e s  was  so broad t h a t f i t t i n g a curve o r s t r a i g h t l i n e t o the r e s u l t s , o r 48 even d e t e c t i n g a c e n t r a l tendency, was v i r t u a l l y i m p o s s i b l e . He concluded t h a t t h e r e s u l t s of h i s t e s t were: 46 I b i d . , p. 115. 4 7  IMi«» P. -5. 1]  48 I b i d . , p.  130.  174 so d i f f u s e as t o n o t l e n d any s u p p o r t to the hypothesis ( t h a t the value o f the parameter i s a f u n c t i o n o f t h e type o f shopping t r i p ) . 4 9 P e r h a p s more i m p o r t a n t , he could n o t f i n d s u f f i c i e n t  evidence  t o s u p p o r t t h e c h o i c e o f any one a b s o l u t e v a l u e o f lambda f o r a p a r t i c u l a r type o f shopping  trip.  The lambda v a l u e s were t o o  d i f f u s e ( a t h i g h l e v e l s o f R) t o p e r m i t c h o o s i n g any p a r t i c u l a r value with  confidence. I t would appear t h a t t h e attempt  determinants  o f consumer behaviour  to a b s t r a c t the primary  i n t o a f o r m u l a has r e s u l t e d i n  a c h o i c e o f v a r i a b l e s and parameters which a r e t o o g r o s s I n scope. The f a c t o r s and p a r a m e t e r s and t h e i r s t r u c t u r e d r e l a t i o n s h i p i n the f o r m u l a a r e t o o s i m p l i f i e d and t o o b r o a d l y d e f i n e d t o adeq u a t e l y r e p r e s e n t t h e complex i n f l u e n c e s on consumer s p a t i a l behaviour.  C a l i b r a t i o n o f t h e model i n d i f f e r e n t a r e a s , under  d i f f e r e n t c i r c u m s t a n c e s , and w i t h d i f f e r e n t i n p u t s produces more o f t e n than n o t d i f f e r e n t e x p o n e n t i a l parameter v a l u e s w h i c h t h e model does n o t e x p l a i n :  that i s , the exponential distance para-  meter i s a " c a t c h - a l l " parameter designed  to give r e c o g n i t i o n to  the m u l t i t u d e o f f a c t o r s and i n f l u e n c e s n o t o t h e r w i s e i n t h e model.  contained  E s s e n t i a l l y t h e e x p o n e n t i a l v a l u e can be a l t e r e d  t o produce v a s t l y d i f f e r e n t r e s u l t s w i t h t h e f o r m u l a , even though the s i z e and d i s t a n c e f a c t o r s may remain c o n s t a n t .  The exponent  i s b a s i c a l l y a c o n d i t i o n a l o r c o n t i n g e n c y parameter through  which  a l l t h e consumer p a t r o n a g e v a r i a b l e s n o t i n c l u d e d i n t h e f o r m u l a can a l t e r t h e r e s u l t s produced by those v a r i a b l e s which a r e i n t h e formula.  4  9  Therefore, a l l the s i g n i f i c a n t unrecognized,  I b i d . , p. 1 3 3 .  ignored,  175 and  " l e f t - o v e r " l o c a t i o n v a r i a b l e s can supposedly be g i v e n  n i t i o n through t h i s p a r a m e t e r . e m p i r i c a l l y d e r i v e d , and  But the e x p o n e n t i a l  recog-  values  t h e o r y has not developed to the  are  point  where i t can p r e d i c t what the c o r r e c t n u m e r i c a l v a l u e f o r t h i s exponent w i l l be i n a s p e c i f i c s i t u a t i o n , i n a p a r t i c u l a r geog r a p h i c a l l o c a t i o n , w i t h the s p e c i f i c c i r c u m s t a n c e s  prevalent  i n that l o c a t i o n . I t appears t h a t t o improve the p r e c i s i o n and a b i l i t y of the model, the u n r e c o g n i z e d and  ignored  predictive  variables  w h i c h m i g h t i n f l u e n c e consumer s p a t i a l b e h a v i o u r must be g r e a t e r r e c o g n i t i o n i n the model. best p o s s i b i l i t i e s .  The  Two  given  avenues appear t o o f f e r the  f i r s t involves t h e i r e x p l i c i t  recognition  t h r o u g h the v e h i c l e of the exponents; t h a t i s , they would  be  s p e c i f i c a l l y i n c l u d e d i n the m a t h e m a t i c a l c o n s t r u c t i o n of  the  exponential  parameters.  The  second avenue would i n v o l v e t h e i r  i n c l u s i o n i n the f o r m u l a as v a r i a b l e s a l o n g w i t h the v a r i a b l e s time-distance  and  of  s t o r e a r e a t o c r e a t e some s o r t of weighted  f u n c t i o n w h i c h c o u l d p r e d i c t the p r o b a b i l i t y o f s h o p p i n g . S i n c e the concern o f t h i s s e c t i o n of the t h e s i s i s n o t t o examine methods of model c o n s t r u c t i o n but r a t h e r to examine the f a c t o r s and  i n t e r r e l a t i o n s h i p s i n such models, no attempt w i l l  made t o s p e c i f y w h i c h of the two the b e s t approach.  avenues mentioned above o f f e r s  R a t h e r , the i n t e n t i o n i s t o I l l u s t r a t e  the many f a c t o r s and  be  how  r e l a t i o n s h i p s enumerated i n Chapter IV as  the  p r i m a r y d e t e r m i n a n t s i n f l u e n c i n g consumer s p a t i a l b e h a v i o u r are not  e x p l i c i t l y and  a d e q u a t e l y accounted f o r , o r r e c o g n i z e d ,  the m a t h e m a t i c a l f o r m u l a t i o n  of the model.  The  contention  in here  i s t h a t i f t h e y were, the model m i g h t be more capable of p r o d u c i n g more a c c u r a t e p r e d i c t i o n s .  176 The model does not  seem t o he a b l e to a c c o u n t f o r changes  I n consumer b e h a v i o u r r e s u l t i n g from changes i n the l e v e l o f  un-  c e r t a i n t y f a c e d by the consumer when e v a l u a t i n g a l t e r n a t i v e s and making d e c i s i o n s . the reasoning  I t may  be r e c a l l e d t h a t the model developed from  t h a t consumers form a s u b j e c t i v e p r o b a b i l i t y e s t i m a t e  of success regarding  a p a r t i c u l a r store f o r p a r t i c u l a r items,  t h a t the a t t r a c t i n g power of t h a t s t o r e c o u l d be r e p r e s e n t e d the proxy v a r i a b l e store area. r e s i s t a n t f a c t o r s , represented  estimates  by  However, t h i s would be m o d i f i e d  by  by the p r o x y v a r i a b l e d i s t a n c e , t o  produce a l i k e l i h o o d o f s h o p p i n g . bility  and  B u t , i f the s u b j e c t i v e p r o b a -  were based on b e t t e r knowledge, and were t h u s more  c e r t a i n , the d i s t a n c e f a c t o r would have a r e l a t i v e l y l e s s e r i n f l u e n c e on the consumer's l i k e l i h o o d of s h o p p i n g , s i n c e the sumer's g r e a t e r e x p e c t a t i o n  con-  of a c h i e v i n g s u c c e s s a t a p a r t i c u l a r  s t o r e would r e n d e r the d i s t a n c e f a c t o r r e l a t i v e l y l e s s the consumer would t r a v e l f u r t h e r i f h i s p e r c e i v e d achieving  s u c c e s s was  higher.  Consumers who  regarding  the a v a i l a b l e p r o d u c t mix  important;  likelihood  of  are more knowledgeable  o f f e r e d at a s t o r e w i l l not  as a f f e c t e d by the n u i s a n c e f a c t o r d i s t a n c e as would those  be  who  were l e s s k n o w l e d g e a b l e . The  c e n t r e ' s a d v e r t i s i n g program can be i n s t r u m e n t a l  l e s s e n i n g the u n c e r t a i n t y f a c i n g the consumer.  A  in  well-executed  a d v e r t i s i n g programme could s i g n i f i c a n t l y a l t e r the r e l a t i o n s h i p between a t t r a c t i o n and r e s i s t a n c e f a c t o r s t o the p o i n t where H u f f ' s model (which does not e x p l i c i t l y c o n s i d e r the degree of u n c e r t a i n t y o r l a c k o f i t f a c i n g the consumer) would have t o r e c o g n i z e  various  e x p o n e n t i a l parameter v a l u e s f o r each l e v e l of u n c e r t a i n t y . D i f f i c u l t as i t i s t o e s t i m a t e  rough parameter v a l u e s  anyway, i t  would appear t o be a r a t h e r monumental t a s k t o a s c e r t a i n v a r i a t i o n s  177 i n these values according t o v a r i a t i o n s i n u n c e r t a i n t y . The d i s t a n c e exponent i s f u r t h e r m o d i f i e d by t h e f o l l o w i n g c o n s i d e r a t i o n s , a l l o f which tend to l e s s e n t h e c e r t a i n t y w i t h w h i c h any one p a r t i c u l a r a b s o l u t e v a l u e f o r t h e e x p o n e n t i a l parameter can be chosen: 1)  Product  s u b s t i t u t a b i l i t y - i f the p a r t i c u l a r  shopping  good sought by t h e consumer i s one f o r w h i c h t h e consumer i s u n w i l l i n g t o s u b s t i t u t e o t h e r , s i m i l a r goods ( i n o t h e r words, t h i s good has a c e r t a i n u n i q u e n e s s ) ; as t o h i s l i k e l y ticular retail  and i f t h e consumer i s u n c e r t a i n  success i n f i n d i n g t h a t s p e c i f i c good a t : a p a r -  facility,  then he w i l l d e s i r e a b r o a d e r  goods o f t h i s g e n e r a l t y p e , and w i l l  selection of  show a c o r r e s p o n d i n g  n e s s t o t r a v e l f a r t h e r t o o b t a i n such goods.  willing-  The e x p o n e n t i a l  parameter i n t h i s case would be a l t e r e d by such a c o n s i d e r a t i o n . F u r t h e r m o r e , t h e degree o f s u b s t i t u t a b i l i t y depends on a m u l t i tude o f f a c t o r s i n c l u d i n g e s t a b l i s h e d brand p r e f e r e n c e s ; a d v e r t i s ing  and p r o m o t i o n a f f e c t i n g t h e consumer; income and s o c i a l c l a s s  o f t h e consumer, e t c .  That these v a r i a b l e s d i f f e r from a r e a t o  area f o r t h e same g e n e r a l type o f good r e n d e r s the problem o f d e f i n i n g a b s o l u t e e x p o n e n t i a l v a l u e s f o r the d i s t a n c e parameter difficult  at least. 2)  P r i c e comparison - i f t h e o p p o r t u n i t y e x i s t s f o r  b e t t e r p r i c e comparison a t a f a c i l i t y w h i c h o f f e r s a broader s e l e c t i o n o f t h e g e n e r a l type o f good sought a f t e r , t h e consumer will likely  be w i l l i n g t o t r a v e l f u r t h e r t o a c h i e v e p r i c e s a v i n g s .  The e f f e c t i s m o d i f i e d by t h e socio-economic  c l a s s o f t h e con-  sumer, t h e number o f l o c a t i o n s o f f e r i n g p r i c e - c o m p a r i s o n  shopping  i n c l o s e p r o x i m i t y t o t h e p l a c e o f r e s i d e n c e , e t c . , a l l o f which  178 tend t o m o d i f y t h e d i s t a n c e exponent f o r t h e p a r t i c u l a r shopping item.  The degree o f m o d i f i c a t i o n i n t h e parameter depends on t h e  r e l a t i v e s t r e n g t h o f such m o d i f y i n g i n f l u e n c e s i n t h e geographical  a r e a under s t u d y . 3)  A b s o l u t e p r i c e - p r o d u c t s which have a r e l a t i v e l y  h i g h p r i c e i n r e l a t i o n to t h e consumer's income a r e u s u a l l y more c a r e f u l l y s e l e c t e d by the consumer. the  He f i n d s i t w o r t h w h i l e ( s i n c e  e x p e n d i t u r e i s r e l a t i v e l y h i g h ) t o shop around f o r b r o a d e r  s e l e c t i o n b o t h i n s t y l e s and q u a l i t i e s as w e l l as p r i c e .  The con-  sumers w i l l be w i l l i n g t o t r a v e l f a r t h e r i n p u r s u i t o f such i t e m s i n o r d e r t o a s s u r e themselves t h a t they have purchased w i s e l y and have r e c e i v e d t h e most s u i t a b l e i t e m ( i n terms o f p e r s o n a l t a s t e s and p r e f e r e n c e s ) f o r t h e r e l a t i v e l y l a r g e monetary o u t l a y .  Any  f a c i l i t y w h i c h o f f e r s a w i d e r s e l e c t i o n w i l l be more l i k e l y t o s a t i s f y t h e consumer who e x p e c t s t h a t t h e w i d e r s e l e c t i o n  will  p r o v i d e him w i t h a b e t t e r c h o i c e f o r t h i s r e l a t i v e l y i m p o r t a n t (to him) p u r c h a s e . 4)  S o c i a l l y s i g n i f i c a n t p u r c h a s e s - c e r t a i n goods p r o -  v i d e a degree o f s a t i s f a c t i o n to t h e consumer r e l a t e d t o t h e s o c i a l s t a t u s a s s o c i a t e d w i t h such i t e m s .  C l o t h i n g , f o r example,  i s s o c i a l l y i m p o r t a n t t o most consumers t o t h e e x t e n t t h a t they are  w i l l i n g t o t r a v e l f a r t h e r t o f i n d broader s e l e c t i o n i n s t y l e ,  q u a l i t y , p r i c e , and p r e s t i g e v a l u e .  The g r e a t e r t h e s o c i a l  s i g n i f i c a n c e o f such i t e m s t o t h e consumer, t h e more i m p o r t a n t they w i l l be t o h i m , and t h e more w i l l i n g he w i l l be t o go more out o f h i s way t o a c h i e v e a s a t i s f a c t o r y p u r c h a s e .  Again, s o c i a l  s t a t u s , income s t a t u s , age l e v e l , s t o r e image, a l t e r n a t i v e facilities of  a v a i l a b l e , and a d v e r t i s i n g can a l l a f f e c t t h e l i k e l i h o o d  a p a r t i c u l a r consumer i n a p a r t i c u l a r g e o g r a p h i c a l a r e a shopping  179 at a p a r t i c u l a r r e t a i l outlet.  The d i s t a n c e exponent would have  t o he m o d i f i e d t o a c c o u n t f o r t h e s e v a r i a t i o n s i n consumer m o t i v a t i o n and b e h a v i o u r , and the m o d i f i c a t i o n s would have t o be d i f f e r e n t a c c o r d i n g t o t h e w e i g h t t h a t each i n f l u e n c i n g f a c t o r c a r r i e s i n each a r e a f o r each c l a s s o f  consumer.  I n summary, t h e d i s t a n c e exponent v a r i e s a c c o r d i n g t o : the t y p e o f merchandise sought; t h e degree t o which c e r t a i n goods are i m p o r t a n t t o the consumer;  the i m p o r t a n c e t o the consumer o f  s e l e c t i o n , q u a l i t y , p r i c i n g , and depth o f merchandise o f f e r e d ; the degree o f s e l e c t i v i t y i n t h e purchase d e c i s i o n ; the s o c i a l  signi-  f i c a n c e a t t a c h e d t o c e r t a i n t y p e s o f merchandise; consumer w i l l i n g n e s s t o a c c e p t s u b s t i t u t e m e r c h a n d i s e ; p s y c h o l o g i c a l b l o c k s caused by v a r i o u s g e o g r a p h i c a l c o n s i d e r a t i o n s ; r o a d c a p a c i t i e s ,  traffic  c o n g e s t i o n , and c o n d i t i o n s o f a c c e s s i b i l i t y ; the a v a i l a b i l i t y , p r o x i m i t y , q u a l i t y and e f f e c t i v e n e s s of competing r e t a i l  establish-  ments; and a l l o t h e r a t t r a c t i v e a s p e c t s of the s u b j e c t l o c a t i o n . The e x t e n t t o w h i c h t h e above f a c t o r s m o d i f y t h e e f f e c t o f d i s t a n c e ( d i s t a n c e exponent) d i f f e r s a c c o r d i n g t o f a m i l y s i z e s , age groupi n g s , income s t a t u s , and s o c i a l s t a t u s o f the consumers i n t h e area. F u r t h e r m o r e , as c i t e d p r e v i o u s l y , i t appears t h a t the two v a r i a b l e s i n H u f f ' s model ( s t o r e a r e a and d i s t a n c e ) may  be  i n s u f f i c i e n t i n themselves as p r o x y v a r i a b l e s to p e r m i t the model t o a c c u r a t e l y p r e d i c t consumer b e h a v i o u r .  We have mentioned the  f a c t o r s w h i c h m o d i f y the e f f e c t o f d i s t a n c e , and i t i s academic whether t h e s e f a c t o r s s h o u l d be r e c o g n i z e d i n the form o f v a r i a b l e s o r t h r o u g h t h e e x p a n s i o n of the e x p o n e n t i a l parameter. But s t o r e s i z e as a p r o x y v a r i a b l e ( w i t h no m o d i f y i n g exponent)  180  may  not be adequate t o r e p r e s e n t  such a s :  o t h e r a s p e c t s of a t t r a c t i o n  s i z e s of the i n d i v i d u a l s t o r e s i n the c e n t r e ; a t t r a c t i v e  d e s i g n and l a y o u t ; v a r i e t y i n t e n a n t - t y p e s ;  merchandise  mix,  b r e a d t h of s e l e c t i o n , range o f c o l o u r s , q u a l i t i e s , s t y l e s , s i z e s ; competitive  or market-oriented  or unique p r i c i n g p o l i c i e s ;  t h e image p r o j e c t e d by the c e n t r e ; i t s r e p u t a t i o n ; the or l a c k of f r e e parking; amenities appropriateness  and  and  the  effectiveness  F u r t h e r m o r e , the i m p o r t a n c e  e f f e c t of each of t h e s e f a c t o r s d i f f e r s a c c o r d i n g f a m i l y , age group, income s t a t u s , and sumers i n the  availability  community f a c i l i t i e s ;  of the h o u r s of b u s i n e s s ;  o f t h e p r o m o t i o n a l programme.  and  and  t o the s i z e of  s o c i a l s t a t u s of the con-  area.  T h i s s u g g e s t s t h a t e i t h e r o t h e r f a c t o r s of a t t r a c t i o n c o u l d be i n c l u d e d , or an exponent m o d i f y i n g v a r i a b l e c o u l d be  the s t o r e a r e a p r o x y  included.  The major problem w i t h g r a v i m e t r i c models i s t h a t they attempt t o p r e d i c t average b e h a v i o u r , and i n d o i n g so, they tend t o de-emphasize those i n f l u e n c e s which can a f f e c t i n d i v i d u a l d e c i s i o n making.  As a g e n e r a l p r e m i s e I t may  be q u i t e t r u e  s t o r e a r e a and d i s t a n c e would produce an a c c u r a t e  that  p r e d i c t i o n of  consumer b e h a v i o u r i f a l l o t h e r t h i n g s were e q u a l , which of course they never are.  D i f f e r e n t i n t e r f e r i n g Influences exert  themselves  i n v a r y i n g degrees on i n d i v i d u a l consumers, a f f e c t i n g t h e i r d e c i s i o n s , and  d i s t o r t i n g the s i m p l e  store s i z e - distance  relationship.  These o t h e r f a c t o r s are b a s i c a l l y a d d i t i o n a l  f a c t o r s of a t t r a c t i o n and r e s i s t a n c e as p e r c e i v e d  by the consumer  w h i c h m o d i f y the r e l a t i v e Importance and b a s i c r e l a t i o n s h i p of the p r o x y v a r i a b l e s I n H u f f ' s model.  181 The v a r i o u s f a c t o r s w h i c h i n f l u e n c e a consumer's c h o i c e for  shopping must be combined i n t o some s o r t o f weighted f u n c t i o n  which can r e c o g n i z e cision-making  t h e i r r e l a t i v e importance i n t h e consumer de-  process,  and which can t h e r e f o r e b e t t e r p r e d i c t t h e  p r o b a b i l i t y o f consumer c h o i c e . Huff himself recognized  t h a t h i s model was n o t i n f a l l i b l e .  He concluded t h a t : m a t h e m a t i c a l models a r e n o t i n f a l l i b l e . They a r e , by n e c e s s i t y , s i m p l i f i e d cons t r u c t s o f some a s p e c t o f r e a l i t y . I t i s i m p o s s i b l e f o r such c o n s t r u c t s t o i n c l u d e a l l t h e p o s s i b l e f a c t o r s t h a t may have a b e a r i n g on a p a r t i c u l a r p r o b l e m . T h e r e f o r e d e c i s i o n makers should be aware t h a t t h e r e a r e v a r i a b l e s o t h e r t h a n those s p e c i f i e d i n t h e model t h a t a f f e c t t h e s a l e s o f a r e t a i l f i r m . The r e p u t a t i o n o f a f i r m , the newness o f t h e s t o r e , t h e merchandise that i t c a r r i e s , the services i t o f f e r s , e t c . , a r e b u t a few examples o f a d d i t i o n a l v a r i a b l e s - human judgment p l a y s an Important r o l e i n a r r i v i n g a t an a d j u s t e d s a l e s estimate.50 I n f a c t a t t h e p r e s e n t l e v e l o f knowledge i n model developments o f t h i s t y p e , i t appears t h a t human judgment i s n o t o n l y i t i s essential.  important,  T h i s i n i t s e l f i s n o t n e c e s s a r i l y a bad t h i n g ,  but t h e g o a l o f r e s e a r c h  should  be t o d e v e l o p t o o l s o f s u f f i c i e n t  p r e c i s i o n such t h a t t h e n e c e s s i t y f o r s u b j e c t i v e judgment w i l l be minimized.  When e v a l u a t i n g t h e models d i s c u s s e d  above, i t seems  i m p o r t a n t t o keep i n mind t h a t a l t h o u g h t h e use o f analogy ( t o Newton's o r i g i n a l f o r m u l a ) i n d e v e l o p i n g  a model may be a t t r a c t i v e ,  f l e x i b i l i t y must be m a i n t a i n e d or t h e approach becomes dogmatic. Q u i t e p o s s i b l y t h e r e may be a p o i n t a t w h i c h r e f e r r i n g back t o t h e  H u f f , A Programmed S o l u t i o n f o r E s t i m a t i n g R e t a i l P o t e n t i a l s , p. 3.  Sales  182 o r i g i n a l a n a l o g y can r e t a r d p r o g r e s s ,  i t t h i s p o i n t , s e r i o u s con-  s i d e r a t i o n s h o u l d he g i v e n t o t h e q u e s t i o n o f whether t h e o r i g i n a l a n a l o g y s h o u l d he de-emphasized  i n f a v o u r o f o t h e r , more f r u i t f u l  approaches. In are  t h e case o f g r a v i t y models o f human i n t e r a c t i o n which  based on l a w s i n p h y s i c a l s c i e n c e , a fundamental  a r i s e s from t h e a n a l o g y between m o l e c u l e s and p e o p l e :  difficulty t h e human  b e i n g as an i n d i v i d u a l can make d e c i s i o n s w i t h r e s p e c t t o h i s b e h a v i o u r whereas t h e m o l e c u l e cannot.  T h i s does n o t n e c e s s a r i l y  i m p l y t h a t t h e b e h a v i o u r o f l a r g e numbers o f i n d i v i d u a l s  cannot  be a g g r e g a t e l y d e s c r i b e d w i t h some m a t h e m a t i c a l u n i f o r m i t y , b u t i f t h a t m a t h e m a t i c a l d e s c r i p t i o n o f aggregated b e h a v i o u r cannot t o l e r a t e the myriad i n f l u e n c e s producing v a r i a t i o n s i n i n d i v i d u a l d e c i s i o n s , then t h e v a l i d i t y o f such m a t h e m a t i c a l d e s c r i p t i o n s as p r e d i c t i v e t o o l s i s i n doubt.  I t appears t h a t a t some p o i n t  a g g r e g a t i v e averages cannot a d e q u a t e l y d e s c r i b e b e h a v i o u r .  This  i s t h e p o i n t where t h e power of i n d i v i d u a l dec!sion-making w i t h a l l t h e c o m p l e x i t i e s a f f e c t i n g t h a t d e c i s i o n can c r i t i c a l l y a f f e c t what t h e f o r m u l a s a r e t r y i n g t o measure.  In effect  this  c a s t s doubt on whether b a s i c and s i m p l i f i e d m a t h e m a t i c a l o p e r a t i o n s a r e l e g i t i m a t e p r o c e d u r e s i n models o f human b e h a v i o u r . A. p a r t i c u l a r f o r m u l a may i n g e n e r a l r e p r e s e n t t h e b a s i c p e r s p e c t i v e about which g e n e r a l c l a s s e s o f c a u s a l f a c t o r s a r e i m p o r t a n t ( f o r example a t t r a c t i o n and r e s i s t a n c e ) b u t t o o - s i m p l i f i e d a f o r m u l a which s u b s t i t u t e s s i m p l y p r o x y v a r i a b l e s t o r e p r e s e n t t h e g e n e r a l c l a s s ( f o r example d i s t a n c e f o r r e s i s t a n c e ) i s i n a l l l i k e l i h o o d too  simple to adequately represent the necessary complexities  governing a behaviour.  I t w i l l n o t a d e q u a t e l y cope w i t h t h e  183 c o m p l e x i t i e s of r e a l i t y . such a f o r m u l a must he  I n t h i s case, the p r e d i c t i v e value of questioned. Summary  Many assumptions a r e made i n m a r k e t i n g about t h e f a c t o r s w h i c h i n f l u e n c e consumer s p a t i a l b e h a v i o u r .  Models a r e i n t e n d e d  t o e x p l i c i t l y c l a r i f y some o f t h e s e f a c t o r s and t h e i r  inter-  r e l a t i o n s h i p s i n o r d e r t h a t b e h a v i o u r can be b e t t e r u n d e r s t o o d and the number of assumptions and g e n e r a l  statements reduced.  Many  such models f o l l o w t h e i d e a t h a t t h e p r o b a b i l i t y o f consumer a c t i o n i s a d i r e c t f u n c t i o n of the a t t r a c t i v e f a c t o r s of a l o c a t i o n , and an I n v e r s e f u n c t i o n o f t h e r e s i s t a n c e o r c o s t f a c t o r s involved i n responding t o that a t t r a c t i o n .  The models  discussed  above attempted t o i n c l u d e from among those f a c t o r s mentioned i n C h a p t e r I V o n l y those whieh were c o n s i d e r e d  necessary to b u i l d a  model o f s u f f i c i e n t p r e d i c t i v e a b i l i t y . In a general  sense, models a r e meant t o be r e p r e s e n t a -  t i o n s o f observed r e a l i t y .  They attempt t o a b s t r a c t c e r t a i n  p r o p e r t i e s o f a r e l a t i o n s h i p and then s t r u c t u r e them t o r e p r e s e n t t h a t r e l a t i o n s h i p . However, t h e d a t a i n p u t s which a r e a b s t r a c t e d i n t h e model are r a r e l y as e x a c t l y r e l a t e d as t h e model must assume.  To t h i s degree, model r e s u l t s must o f t e n be r e g a r d e d as  a p p r o x i m a t i o n s o f r e a l i t y i n s o f a r as t h e y o f t e n a r e e x p r e s s e d i n c l e a r l y d e f i n e d a b s t r a c t i o n s o f n o t so c l e a r l y d e f i n e d r e a l i t y i n o r d e r t h a t some w o r k a b l e f o r m u l a can be a c h i e v e d .  As a r e s u l t ,  models a r e o f t e n o v e r s i m p l i f i c a t i o n s o f r e a l i t y , a c o n d i t i o n which i s o f t e n n e c e s s a r y i f any a b s t r a c t i o n i s t o be attempted at a l l .  I n t h i s sense, t h e a b s t r a c t i o n p r o c e s s o f n e c e s s i t y  184 i g n o r e s o r n e g l e c t s some of the c o n d i t i o n a l a s p e c t s of i n o r d e r t h a t some r e l a t i o n s h i p s may form. due  he c l a r i f i e d i n t h e i r  I f such a "pure" r e l a t i o n s h i p does not  to c o n d i t i o n a l i n f l u e n c e s ,  and  reality simplest  exist i n reality  i f such c o n d i t i o n a l  influences  n o r m a l l y a f f e c t these r e l a t i o n s h i p s i n a manner f a r d i f f e r e n t than i m p l i e d  i n the model, t h e n the model must he a l t e r e d  to  a c c o u n t f o r t h e s e c o n d i t i o n a l f a c t o r s , o t h e r w i s e i t i s not representative  of the d e t e r m i n i n g f a c t o r s .  d e s c r i p t i o n of a r e l a t i o n s h i p " f i t s ' i n g key  v a r i a b l e s and  1  I f , however, the model  w e l l w i t h r e a l i t y by  isolat-  parameters w h i c h f u n c t i o n as d e s c r i b e d i n  the model e x c e p t f o r m i n o r c o n d i t i o n a l i n f l u e n c e s ,  then these  c o n d i t i o n a l I n f l u e n c e s can be r e c o g n i z e d but l e f t out, o n l y to the  e x t e n t t h a t i n d o i n g so, the r e s u l t a n t a b s t r a c t i o n  s t i l l b e a r s c l o s e resemblance to the p r i m a r y f a c t o r s I n and  does not  contingencies.  of  reality  reality  s u f f e r a l o s s of c r e d i b i l i t y as a r e s u l t of n e g l e c t e d But from the p r e c e d i n g d i s c u s s i o n ,  that further research i s required  to extend and  i t would appear  r e f i n e the models,  e i t h e r t h r o u g h expanding the number of v a r i a b l e s i n the  formulae  o r through r e s t r u c t u r i n g the p a r a m e t e r s , i n o r d e r t o improve p r e d i c t i v e c a p a b i l i t i e s of such models.  the  185 CHAPTER V I I CONCLUSIONS Restatement of the Problem As was  s t a t e d i n Chapter I , the problem to which t h i s t h e s i s  addressed i n v o l v e d t h a t p a r t of r e t a i l l o c a t i o n a n a l y s i s which  i s concerned w i t h e s t i m a t i n g the s a l e s volume p o t e n t i a l f o r a •siproposed shopping c e n t r e . The a v a i l a b l e l i t e r a t u r e on the s u b j e c t f o c u s e s on d i f f e r e n t a s p e c t s of the p r o b l e m , sometimes d e s c r i b i n g t e c h n i q u e s f o r s a l e s volume e s t i m a t i n g , sometimes d e s c r i b i n g s p e c i f i c research  e f f o r t s d e s i g n e d t o d e f i n e more a c c u r a t e l y  c r i t i c a l v a r i a b l e s and b e h a v i o u r , and f a c t o r s and  the  r e l a t i o n s h i p s g o v e r n i n g consumer p a t r o n a g e  sometimes d e s c r i b i n g t h e o r e t i c a l models of t h o s e  r e l a t i o n s h i p s which are c o n s i d e r e d  adequate t o  a c c u r a t e l y p r e d i c t b o t h consumer patronage b e h a v i o u r and c o r r e s p o n d i n g s a l e s volume p o t e n t i a l f o r a new  the  retail outlet.  But the t h e o r y behind s a l e s volume e s t i m a t i n g appeared somewhat d i s j o i n t e d , s i n c e the methods and models emphasized d i f f e r e n t approaches and f a c t o r s , and others. was  ignored  F u r t h e r m o r e , i t was  or inadequately  accounted f o r  apparent t h a t p r e d i c t i v e accuracy  f a r from s a t i s f a c t o r y w i t h the p r e s e n t l y a v a i l a b l e t o o l s of  a n a l y s i s , s i n c e s a l e s volume e s t i m a t e s  appeared t o be prone t o  wide e r r o r s , o r a t l e a s t wide v a r i a t i o n s depending on the methods o f a n a l y s i s employed.  I t was  f e l t t h a t the problem  revolved  around the v a r i o u s arguments, a s s u m p t i o n s , c o n c e p t s , f a c t o r s , and r e l a t i o n s h i p s inherent or missing  i n each model o r method.  # Many o t h e r f a c t o r s ( i n c l u d i n g r e t u r n on Investment c r i t e r i a and l o c a l p o l i t i c a l c o n s t r a i n t s ) w h i c h w i l l have a b e a r i n g on the c h o i c e o f a s i t e and the u l t i m a t e development d e c i s i o n were not c o n s i d e r e d in this thesis.  186 H o p e f u l l y , by examining t h e d e t e r m i n a n t s o f consumer patronage b e h a v i o u r i n t h e c o n t e x t o f t h e p r a c t i s e d methods and t h e o r e t i c a l models, t h e t h e s i s c o u l d :  h i g h l i g h t the c o m p l e x i t i e s  and problems i n v o l v e d i n s a l e s volume e s t i m a t i n g ; i l l u s t r a t e t h e complex i n t e r - d e p e n d e n c i e s o f t h e many v a r i a b l e s and p r e s e n t a more complete p i c t u r e o f a l l t h e f a c t o r s I n v o l v e d ; and f o c u s on t h e reasons behind the apparent i n a d e q u a c i e s o r l i m i t a t i o n s o f t h e p r a c t i s e d methods and t h e o r e t i c a l models f o r s a l e s volume e s t i m a t ing. More s p e c i f i c a l l y , t h e purpose o f t h e t h e s i s was t o : 1)  d i s c u s s t h e v a l i d i t y and l i m i t a t i o n s o f t h e many arguments, assumptions,  c o n c e p t s , f a c t o r s , and r e l a t i o n s h i p s deemed  t o be i m p o r t a n t f o r l o c a t i o n a l s a l e s volume a n a l y s i s , and i n so d o i n g , suggest t h e " b u i l d i n g b l o c k s " o r "raw m a t e r i a l s " which s h o u l d be c o n s i d e r e d and i n c l u d e d i n t h e development o f p r o c e d u r e s and models t o a i d i n s a l e s volume e s t i m a t i n g . 2)  d i s c u s s and a n a l y z e t h e v a r i o u s t e c h n i q u e s and models employed i n shopping c e n t r e volume e s t i m a t i n g i n o r d e r t o a) determine how a d e q u a t e l y and t o what e x t e n t they r e c o g n i z e and i n c o r p o r a t e t h e above f a c t o r s and r e l a t i o n s h i p s , and b) e v a l u a t e t h e i r a b i l i t y t o produce t h e o r e t i c a l l y sound, r e l i a b l e , a c c u r a t e p r e d i c t i o n s .  3)  attempt t o t i e t h e s e v a r i o u s c o n c e p t s , f a c t o r s , t e c h n i q u e s and models i n t o a more comprehensive  overview o f t h e p r o -  blems f a c e d i n e s t i m a t i n g p o t e n t i a l s a l e s volumes, t h e r e b y h i g h l i g h t i n g a r e a s where f u r t h e r r e s e a r c h i s r e q u i r e d t o r e f i n e and improve  t h e t e c h n i q u e s of p r e d i c t i o n .  187 Summary and C o n c l u s i o n s To p r e d i c t t h e expected s a l e s volume which a new c e n t r e w i l l l i k e l y a c h i e v e r e q u i r e s a s c e r t a i n i n g how many consumers w i l l spend a s p e c i f i e d p o r t i o n o f t h e i r income a t t h a t c e n t r e .  It is  t h e r e f o r e n e c e s s a r y t o u n d e r s t a n d the d e t e r m i n a n t s o f consumer patronage b e h a v i o u r , o r how consumers r e a c t t o t h e v a r i o u s f a c t o r s a f f e c t i n g consumer m o t i v a t i o n i n t h e s e l e c t i o n o f a  retail  f a c i l i t y i n w h i c h to purchase t h e v a r i o u s goods they r e q u i r e .  It  i s a l s o n e c e s s a r y t o be a b l e t o s p e c i f y , q u a n t i t a t i v e l y , how such b e h a v i o u r w i l l be m a n i f e s t e d i n a c e r t a i n a r e a i n r e g a r d t o a particular retail  facility.  Shopping b e h a v i o u r i s governed by t h e consumer's p e r s p e c t i v e towards c e r t a i n b e n e f i t and c o s t f a c t o r s :  what s a t i s -  f a c t i o n can be a c h i e v e d a t what c o s t i n money, time and e f f o r t . A retail  f a c i l i t y e x e r t s an a t t r a c t i v e i n f l u e n c e which d i m i n i s h e s  as d i s t a n c e from the c e n t r e i n c r e a s e s , a r e s u l t o f t h e f a c t t h a t t r a v e l c o s t s (money, t i m e , e f f o r t , and i n c o n v e n i e n c e ) i n c r e a s e with distance.  The problem  o f a s c e r t a i n i n g expected consumer  patronage t h e n b o i l s down t o a s s e s s i n g t h e c o s t s t h a t consumers will  s u s t a i n t o respond t o c e r t a i n a t t r a c t i o n s . F o r t h e sake o f a n a l y s i s , t h e s e c o s t s a r e n o r m a l l y  r e p r e s e n t e d by d i s t a n c e i n p h y s i c a l o r t i m e - u n i t s .  B u t as con-  tended i n Chapter I V , t h e e f f e c t o f d i s t a n c e on shopping b e h a v i o u r varies according t o :  t h e t y p e of merchandise  sought; t h e degree  to which c e r t a i n goods a r e i m p o r t a n t t o t h e consumer; t h e import a n c e t o t h e consumer o f s e l e c t i o n , q u a l i t y , p r i c i n g , and depth of merchandise  o f f e r e d ; t h e degree of s e l e c t i v i t y i n t h e purchase  d e c i s i o n ; the s o c i a l s i g n i f i c a n c e attached to c e r t a i n kinds of  188  merchandise; consumer w i l l i n g n e s s t o a c c e p t s u b s t i t u t e merchandise; p s y c h o l o g i c a l and g e o g r a p h i c a l b a r r i e r s ; road c a p a c i t i e s , t r a f f i c c o n g e s t i o n and c o n d i t i o n s o f a c c e s s i b i l i t y ; and the a v a i l a b i l i t y , p r o x i m i t y , q u a l i t y and e f f e c t i v e n e s s o f competing r e t a i l ments.  establish-  The e x t e n t t o which the above f a c t o r s modify t h e e f f e c t o f  d i s t a n c e d i f f e r s a c c o r d i n g t o f a m i l y s i z e , age g r o u p i n g s , income s t a t u s and s o c i a l s t a t u s o f t h e consumers i n any p a r t i c u l a r a r e a . I g a i n as suggested  i n Chapter I V , the a t t r a c t i v e i n -  fluence of a r e t a i l f a c i l i t y v a r i e s according t o :  t h e s i z e o f the  c e n t r e and the s i z e s o f v a r i o u s s t o r e s i n the c e n t r e ; a t t r a c t i v e d e s i g n and l a y o u t ; v a r i e t y i n t e n a n t - t y p e s ; merchandise mix, b r e a d t h o f s e l e c t i o n , range o f c o l o u r s , s i z e s , q u a l i t i e s , and s t y l e s ; comp e t i t i v e o r m a r k e t - o r i e n t e d o r u n i q u e p r i c i n g p o l i c i e s ; the image and r e p u t a t i o n o f the c e n t r e ; t h e a v a i l a b i l i t y o r l a e k of f r e e p a r k i n g ; a m e n i t i e s and community f a c i l i t i e s ; hours o f b u s i n e s s ; and t h e e f f e c t i v e n e s s o f t h e p r o m o t i o n a l programme.  The  importance  and e f f e c t o f these f a c t o r s v a r i e s i n t u r n a c c o r d i n g t o the s i z e o f f a m i l y , age group, income s t a t u s , and s o c i a l s t a t u s o f t h e consumers i n t h e a r e a . The p r a c t i s e d methods and t h e o r e t i c a l models were then examined t o determine how a d e q u a t e l y t h e p r e c e d i n g f a c t o r s and i n t e r r e l a t i o n s h i p s were r e c o g n i z e d o r q u a n t i f i e d i n them, and t o what e x t e n t these methods and models were capable o f g e n e r a t i n g r e l i a b l e , accurate p r e d i c t i o n s . The Market Share, Vacuum C a l c u l a t i o n , and A n a l o g t e c h n i q u e s were examined and i t was observed  t h a t w h i l e the  methods attempted  to r e c o g n i z e t h e d e t e r m i n a n t s  o f consumer be-  h a v i o u r suggested  above and sought t o account f o r them i n the  189 a n a l y t i c a l techniques  o f e s t i m a t i n g the drawing power o f a p r o -  posed c e n t r e , t h e d e t e r m i n a n t s  and t h e i r i n t e r r e l a t i o n s h i p s were  i m p r e c i s e l y , s u b j e c t i v e l y , and i n a d e q u a t e l y q u a n t i f i e d . Problems and l i m i t a t i o n s were e v i d e n t i n s e v e r a l a r e a s :  i n the c o n s i d e r a b l e  r e l i a n c e on s u b j e c t i v e judgment; i n e s t i m a t i n g the s a l e s volume c a p t u r e d by competing r e t a i l o u t l e t s ; i n e s t i m a t i n g the t r a d e a r e a boundary or the l i m i t o f e f f e c t i v e a t t r a c t i o n e x e r t e d by a p a r t i c u l a r f a c i l i t y ; and i n g u e s s i n g the market share which t h a t c e n t r e would l i k e l y a c h i e v e i n a g i v e n a r e a .  I n view of the  e x c e s s i v e r e l i a n c e on s u b j e c t i v e assumptions and s i n c e the d e t e r m i n a n t s q u a n t i f i e d , i t was to  of behaviour  concluded  Judgments, and  are a r b i t r a r i l y and  t h a t t h e r e was  the a b i l i t y o f these methods t o generate  inadequately  c o n s i d e r a b l e doubt as r e l i a b l e , accurate,  and  c o n s i s t e n t p r e d i c t i o n s based on t h e o r e t i c a l l y sound measurements. The e x a m i n a t i o n observations that:  o f R e i l l y * s law concluded  w i t h the  the law was n o t a p p r o p r i a t e t o i n t r a - u r b a n  s e t t i n g s where c o m p e t i t i v e i n f l u e n c e s a r e numerous and there i s l i t t l e  overlapping;  j u s t i f i c a t i o n f o r h i s c h o i c e o f 2 as the v a l u e o f  the d i s t a n c e exponent; the proxy v a r i a b l e s p o p u l a t i o n and may  distance  n o t be s u f f i c i e n t l y r e p r e s e n t a t i v e as c a u s a l v a r i a b l e s to  d e s c r i b e and p r e d i c t consumer p a t r o n a g e b e h a v i o u r c o n s i s t e n t l y . It  appeared t h a t o t h e r f a c t o r s w h i c h a f f e c t consumer patronage  b e h a v i o u r were n o t g i v e n adequate r e c o g n i t i o n i n a f o r m u l a which c o n s i d e r e d o n l y the proxy v a r i a b l e s s i z e and d i s t a n c e ; and model c o n t a i n s l i t t l e observed  t h e o r e t i c a l c o n t e n t and  the  cannot e x p l a i n  regularities. The d i s t i n c t c o n t r i b u t i o n o f the p r o b a b i l i t y models  i s t h e i r p r o b a b i l i s t i c n o t i o n whereby the i d e a o f a f i x e d l i n e  190 c i r c u m s c r i b i n g a c e n t r e ( t r a d e a r e a boundary) i s r e p l a c e d by a s e r i e s of p r o b a b i l i t y contours.  But a f t e r examining  b a b i l i t y models, i t appeared t h a t t h e attempt primary determinants  the pro-  t o a b s t r a c t the  o f consumer b e h a v i o u r i n t o a f o r m u l a had  r e s u l t e d i n a c h o i c e o f v a r i a b l e s and parameters which were t o o g r o s s i n scope t o p e r m i t a c c u r a t e p r e d i c t i o n s .  The e x p o n e n t i a l  d i s t a n c e parameter performed the f u n c t i o n o f a " c a t c h - a l l " p a r a meter through which t h e m u l t i t u d e o f i n f l u e n c e s and f a c t o r s n o t o t h e r w i s e c o n t a i n e d i n t h e model c o u l d e x e r t t h e i r i n f l u e n c e . Determining  a s a t i s f a c t o r y v a l u e o r v a l u e s f o r t h i s parameter was  a complex problem because t h e t h e o r e t i c a l e x p l a n a t i o n o f i t s cons t r u c t i o n was r e s t r i c t e d t o the e f f e c t t h a t t h e type o f merchand i s e sought had on t h e d i s t a n c e v a r i a b l e .  Other f a c t o r s and i n -  f l u e n c e s which caused t h e exponent t o v a r y were suggested f a c t o r s are l i s t e d e a r l i e r i n t h i s concluding s e c t i o n ) .  (these The p r o x y  v a r i a b l e f o r a t t r a c t i o n was a l s o c r i t i c i z e d and o t h e r f a c t o r s w h i c h v a r y t h e w e i g h t i n g o f t h i s v a r i a b l e were suggested  (again,  these are l i s t e d e a r l i e r i n t h i s concluding s e c t i o n ) . The d i s c u s s i o n concluded w i t h t h e o b s e r v a t i o n t h a t t h e p r e s e n t l y a v a i l a b l e p r o b a b i l i s t i c models r e q u i r e s u b j e c t i v e i n t e r p r e t a t i o n i f they a r e t o be a t a l l u s e f u l .  B u t the models, when  a p p l i e d i n c o n j u n c t i o n w i t h s u b j e c t i v e judgment and e x p e r i e n c e , can be u s e f u l a n a l y t i c a l t o o l s i n s p i t e o f t h e i r l i m i t a t i o n s . The t a s k remains t o f u r t h e r r e f i n e and extend t h e models t o improve t h e i r d e s c r i p t i v e and p r e d i c t i v e c a p a b i l i t i e s .  This w i l l  r e q u i r e t h a t t h e models more e x p l i c i t l y r e c o g n i z e t h e d e t e r m i n a n t s o f consumer s p a t i a l b e h a v i o u r .  I t i s suggested  here that i f the  f a c t o r s mentioned above were more e x p l i c i t l y r e c o g n i z e d i n t h e  191  f o r m u l a e , e i t h e r t h r o u g h expanding t h e numher o f v a r i a b l e s i n the f o r m u l a e , o r through r e - s t r u c t u r i n g the parameters, t h e d e s c r i p t i v e and p r e d i c t i v e c a p a b i l i t i e s o f these models might be improved. I n summary, t h e r e remains a g r e a t need f o r more b a s i c r e s e a r c h and a g r e a t e r coherence o f t h e o r y t o s p e c i f y t h e " b u i l d i n g b l o c k s " f o r a more comprehensive model o f consumer s p a t i a l b e h a v i o u r w h i c h would be capable o f d e s c r i p t i o n and p r e d i c t i o n a t a l e s s a g g r e g a t i v e , more m i c r o s c o p i c l e v e l .  BIBLIOGRAPHY BOOKS Applebaum, W. P a t t e r n s o f Food D i s t r i b u t i o n I n t h e M e t r o p o l i s . ChicagoT Super Market I n s t i t u t e , 1966. S t o r e L o c a t i o n S t r a t e g y Cases. Reading, M a s s a c h u s e t t s . Addison-Wesley P u b l i s h i n g Co., 1968. , Brown, M.P., and Salmon, W.J. S t r a t e g y Problems o f Mass R e t a i l e r s and W h o l e s a l e r s . Homewood, I l l i n o i s . R i c h a r d D. I r w i n , I n c . , 1970. B a k e r , G., and Fumaro, B. Shopping C e n t r e s , D e s i g n and O p e r a t i o n . New Y o r k . R e i n h o l d P u b l i s h i n g Corp., 1951. B e r r y , B.J.L., and P r e d , A. C e n t r a l P l a c e S t u d i e s : A B i b l i o g r a p h y of Theory and A p p l i c a t i o n s . P h i l a d e l p h i a , Penn. R e g i o n a l S c i e n c e Research I n s t i t u t e , 1965. . Geography o f Market C e n t r e s and R e t a i l D i s t r i b u t i o n . Englewood C l i f f s , New J e r s e y . P r e n t i c e - H a l l , I n c . , 1967. B r u s h , J.E., and G a u t h i e r , H.L. S e r v i c e C e n t r e s and Consumer T r i p s * C h i c a g o . Research P a p e r 1 1 3 , U n i v e r s i t y o f C h i c a g o , 1967. B u c k l i n , L.P. Shopping P a t t e r n s I n an Urban A r e a . Research P r o gram i n M a r k e t i n g . B e r k e l e y , C a l i f o r n i a . I b e r S p e c i a l P u b l i c a t i o n s , 1967. C h a p i n , F.S. Urban Land Use P l a n n i n g . I l l i n o i s , 1965.  Urbana, U n i v e r s i t y o f  Converse, P.D. A Study o f R e t a i l Trade -Areas i n E a s t C e n t r a l I l l i n o T s 1 Urbana, U n i v e r s i t y o f I l l i n o i s P r e s s , 1943. .  R e t a i l Trade A r e a s i n I l l i n o i s .  of I l l i n o i s P r e s s ,  1946.  Urbana, U n i v e r s i t y  C u r t i s s , D.L. O p e r a t i o n Shopping C e n t r e s : Guidebook t o E f f e c t i v e Management and P r o m o t i o n ^ Washington, D.C. Urban Land I n s t i t u t e , 1961. G a r n e r , B . J . The I n t e r n a l S t r u c t u r e o f R e t a i l N u c l e a t l o n s . Evanston, I l l i n o i s . S t u d i e s i n Geography Number 12, N o r t h w e s t e r n U n i v e r s i t y , 1966. Gruen, C.  S t o r e L o c a t i o n and Customer B e h a v i o u r . D7c\ Urban Land I n s t i t u t e , 1966.  Washington,  Gruen V., and S m i t h , L. Shopping Towns USA: The P l a n n i n g o f Shopping C e n t r e s . New Y o r k . R e i n h o l d P u h l i s h l n g Corp., 1960. Hoyt, H.  P e o p l e , P l a c e s and P r o f i t s . New Y o r k . Research Monograph f o r t h e N a t i o n a l R e t a i l Merchants A s s o c i a t i o n , 1969.  H u f f , D.L.  D e t e r m i n a t i o n o f I n t r a - U r b a n R e t a i l Trade A r e a s . Los A n g e l e s . U n i v e r s i t y o f C a l i f o r n i a , Graduate School of Business A d m i n i s t r a t i o n , D i v i s i o n of Research, 1962. . A Programmed S o l u t i o n f o r E s t i m a t i n g R e t a i l S a l e s P o t e n t i a l s . Lawrence, Kansas. Centre f o r Regional Studies, 1966.  I n t e r n a t i o n a l C o u n c i l of Shopping C e n t r e s and N a t i o n a l R e t a i l Merchants A s s o c i a t i o n . The Independent R e t a i l e r and t h e Shopping C e n t r e . C h i c a g o . P r o c e e d i n g s o f t h e Independent R e t a i l e r s Shopping Centre Conference, October 2 0 , 1967. J o n a s s e n , C.T. The Shopping Centre V e r s u s Downtown. Columbus, Ohio, Ohio S t a t e U n i v e r s i t y , Bureau o f B u s i n e s s R e s e a r c h , C o l l e g e o f Commerce and B u s i n e s s A d m i n i s t r a t i o n , 1955. Jones, C S . R e g i o n a l Shopping C e n t r e s : and D e s i g n . LondonT E n g l a n d . Kane, B . J .  Their Location, Planning B u s i n e s s Books L t d . , 1 9 6 9 .  A S y s t e m a t i c Guide t o Supermarket L o c a t i o n A n a l y s i s . New York. P a l r c h i l d P u b l i c a t i o n s , 1966.  K e l l e y , E . J . Shopping C e n t r e s : L o c a t i n g C o n t r o l l e d R e g i o n a l C e n t r e s . Saugatuck, C o n n e c t i c u t . The Eno F o u n d a t i o n f o r Highway T r a f f i c C o n t r o l , 1 9 5 6 . K o r n b l a u , C. (ed.) Guide t o S t o r e L o c a t i o n Research. Reading, Massachusetts", Addison-Wesley P u b l i s h i n g Co., 1968. K u l k a r n i , G.S. Food Chain S t o r e L o c a t i o n S t r a t e g y i n M e t r o p o l i t a n P i t t s b u r g h . Ann A r b o r , M i c h i g a n . U n i v e r s i t y o f P i t t s b u r g h , U n i v e r s i t y M i c r o f i l m s I n c . , 1965. Lakshmanan, T.R. A. T h e o r e t i c a l and E m p i r i c a l A n a l y s i s of I n t r a Urban R e t a i l L o c a t i o n . U n p u b l i s h e d M a s t e r s T h e s i s . Ohio S t a t e U n i v e r s i t y , 1 9 6 5 . Lew, M.  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