Retailing Management, 10e (Levy)
Chapter 8 Retail Site Location
1) A metropolitan statistical area (MSA) is a core urban area containing a population of more than
50,000 inhabitants.
2) Accessibility is lesser for sites located near major highways, on uncongested highways, and at
streets with traffic lights and lanes that enable turns into the site.
3) A food court is an example of utilizing the principle of cumulative attraction.
4) The secondary trading area is the geographic area from which the shopping center or store site
derives 50 to 70 percent of its customers.
5) The best way to define the three trade zones is based on distance rather than driving time.
6) Most franchise agreements grant franchisees an exclusive territory to protect them from another
franchisee cannibalizing their sales.
7) When using the analog approach, the retailer finds a site and then describes the desired trade
area characteristics.
8) Conducting a competitive analysis is typically the first step in the selection of a site.
9) In a graduated lease, the rent increases by a fixed amount over a specified period of time.
10) A cotenancy clause prohibits the shopping center management from leasing to retailers that
sell competing products.
11) In the United States, retailers often focus their analysis on a ________ because consumers tend
to shop within this area.
A) micropolitan statistical area
B) competitive statistical area
C) statistical demographic area
D) metropolitan statistical area
E) trade area
12) A city of 50,000 or more inhabitants, or an urbanized area of at least 50,000 inhabitants, with
adjacent communities having a high degree of economic and social integration with the core
community is called a
A) metropolitan urban development.
B) competitive statistical area.
C) statistical demographic area.
D) metropolitan statistical area.
E) trade area.
13) Which of the following refers to a town removed from larger U.S. cities, often by up to 100
miles?
A) Micropolitan statistical area
B) Competitive statistical area
C) Statistical demographic area
D) Metropolitan statistical area
E) Trade area
14) Which of the following does not affect the long-term profit generated by stores when
evaluating store locations?
A) The economic conditions
B) Competition
C) The strategic fit of the areas’ population with the retailer’s target market
D) The cost of operating stores
E) The corporate centralization
15) Which of the following statements is not true when considering and evaluating store locations?
A) The best areas for locating stores are those that generate the highest return on investment in the
short term.
B) It is important to examine an area’s level and growth of population and employment and how
long such growth will continue and how it will affect demand for merchandise sold in its stores.
C) It is important to have the strategic fit of the areas’ population with the retailer’s target market.
D) It is important to consider local and state legal and regulatory environments affecting operating
costs.
16) Which of the following would not affect the operating costs of a store?
A) Having a large MSA
B) Having a small MSA
C) Proximity of the store to the distribution center
D) State regulatory environment
E) Congestion of people and cars
17) Retailers must consider the trade-offs between lower operating costs and potential ________
from having multiple stores in an area.
A) economies of scale
B) economies of scope
C) sales cannibalization
D) channel integration
E) vertical integration
18) Although retailers gain economies of scale from opening multiple locations in an area, they
also suffer diminishing returns associated with locating too many additional stores in an area. This
is called
A) channel competition.
B) economies of scope.
C) sales cannibalization.
D) channel integration.
E) operating turnover.
19) The ________ is the number of vehicles and pedestrians that pass by the site.
A) traffic wave
B) traffic flow
C) traffic count
D) traffic stimulator
E) traffic accessibility
20) Connections to major highways, pedestrian traffic flow, and availability of mass transit are
examples of
A) accessibility.
B) visibility.
C) availability.
D) cost.
E) exclusivity.
21) A retailer that is hard to get to, even if the customer can see it, has low
A) compatibility.
B) accessibility.
C) visibility.
D) cumulative attraction.
E) availability.
22) Retailers study traffic flow, street congestion, and parking space availability when considering
a new store site to determine the potential site’s
A) parallel tenants.
B) accessibility.
C) adjacent tenants.
D) availability.
E) visibility.
23) Which of the following site characteristics refers to the customer’s ability to exit the highway
and enter the parking lot safely?
A) Restrictions and cost
B) Natural barriers
C) Parking
D) Adjacent tenants
E) Traffic flow and accessibility
24) Which of the following retailers would be the most dependent on traffic counts?
A) 7-Eleven
B) Macy’s
C) Bed, Bath and Beyond
D) Old Navy
E) Bill’s Wash-n-Fold
25) Which of the following retailers is the least dependent on traffic counts?
A) 7-Eleven
B) Macy’s
C) Home Depot
D) Old Navy
E) Hot Wings
26) Why is traffic count particularly important for convenience stores?
A) Convenience stores offer impulse merchandise.
B) Convenience stores are located only in MSAs that have a target market.
C) Traffic count means more pedestrian traffic.
D) Traffic count determines flow and accessibility.
E) Traffic count determines visibility.
27) Traffic count is less important for
A) convenience stores.
B) destination retailers.
C) grocery stores.
D) car washes.
E) specialty retailers.
28) The ________ of a site is the ease with which customers can get into and out of the site.
A) traffic flow
B) traffic restriction
C) accessibility
D) vehicular traffic bypass
E) macro analysis
29) Lee Ann was overwhelmed by the heavy traffic outside of her local discount retailer. Her
experience in the store was no better. The aisles were packed, and the lines were long. To Lee Ann,
this discounter didn’t consider the problem of ________ when choosing the site for the store.
A) congestion
B) non-shopper access
C) flow of traffic
D) visibility
E) vulnerability
30) A store that is easy for potential customers to see has high
A) compatibility.
B) accessibility.
C) store congestion.
D) cumulative attraction.
E) visibility.
31) What is the advantage of having your adjacent tenant as a complementary retailer?
A) Shared parking expense
B) Better lease negotiations
C) Visibility
D) Less tenant restrictions
E) Builds customer traffic
32) Store locations in a mall that are located next to one another are ________ stores.
A) adjacent
B) congestion
C) parasite
D) region
E) tertiary
33) Which of the following statements is not true when describing adjacent tenants?
A) Complementary, adjacent retailers have the potential to build traffic.
B) Competing adjacent retailers have the potential to build traffic.
C) Complementary retailers target different market segments and have a similar merchandise
offering.
D) The principle of cumulative attraction states a cluster of similar and complementary retailing
activities have greater drawing power than isolated stores.
E) Adjacent tenants cause congestion, which drives customers away.
34) At the Mall of America, all of the children’s specialty stores are on the ground floor and are
near the Rainforest Café, which also targets adults with children. This would be an example of the
principle of
A) multiple risk.
B) analog approach.
C) cumulative attraction.
D) consumer spotting.
E) diminishing adjacent.
35) A food court in a mall is an example of a(n)
A) multiple risk.
B) analog approach.
C) cumulative attraction.
D) consumer spotting.
E) diminishing adjacent.
36) The grouped location approach is based on the principle of ________, which states that a
cluster of similar and complementary retailing activities will generally have greater drawing
power than isolated stores that engage in the same retailing activities.
A) multiple risk
B) analog approach
C) cumulative attraction
D) consumer spotting
E) diminishing adjacent
37) Which of the following principles explains the success of a shopping center whose tenants
include Kohl’s, Walmart, and Dick’s Sporting Goods?
A) Multiple risk
B) Analog approach
C) Cumulative attraction
D) Consumer spotting
E) Diminishing adjacent
38) When stores such as Bath & Body Works, Victoria’s Secret, Express, and Abercrombie &
Fitch all have store sites near each other in a shopping center, what is this an example of?
A) Multiple risks
B) Analog approach
C) Cumulative attraction
D) Consumer spotting
E) Diminishing adjacent
39) Locations in a shopping center affect both sales and occupancy costs. Which of the following
statements is not true in describing the relationships?
A) The more expensive locations are closest to the supermarket in a strip shopping center.
B) Shops, like a flower shop, that attract impulse buyers should be close to the supermarket in a
strip shopping center.
C) A destination store, like a shoe repair store, should be located close to the supermarket in a strip
shopping center.
D) Stores that cater to consumers engaging in comparison shopping are benefited from being
located in more expensive locations near the department store anchors.
E) A retailer such as Foot Locker need not be in the most expensive location because customers are
in the market for this type of product before they even go shopping.
40) Retailers try to locate their stores close to other retailers that appeal to similar target markets.
Which of the following statements is not true in explaining how and why retailers do this?
A) Customers want to shop where they will find a good assortment of merchandise.
B) Retailers consider complementary retailers in location selections.
C) Retailers must avoid locating close to other retailers that compete directly.
D) Retailers such as the Build-a-Bear Workshop selling stuffed animal toys and the Disney Store
try to have locations close to each other.
E) The principle of cumulative attraction states that a cluster of similar and complementary
retailing activities have greater drawing power than isolated stores that engage in the same
retailing activities.
41) A contiguous geographic area that accounts for the majority of a store’s sales and customers is
called a
A) demographic.
B) metropolitan complex.
C) site location.
D) trade area.
E) target market.
42) Fishing enthusiasts come for miles to shop at Shabby Bill’s, a shack that sells limited tackle and
bait on the North Carolina Outer Banks. Bill attracts this crowd because of his expertise in the
Outer Banks and local folklore. The Outer Banks would be considered Shabby Bill’s’
A) site location.
B) demographically similar area.
C) target market.
D) metropolitan complex.
E) trade area.
43) Which of the following statements is false in describing different categories of trade areas?
A) The primary trading area is the geographic area from which the shopping center or store site
attracts 80 percent of its customers.
B) The secondary trading area is the geographic area of secondary importance in terms of customer
sales, generating about 20–30 percent of the site’s customers.
C) The tertiary trading area includes the remaining customers who shop at the site but come from
widely dispersed areas.
D) The best way to define the three trade zones is based on driving time rather than distance.
E) The location of competitive stores can also affect the actual trade area configuration.