Close
 

How to open a store, part 1: Property

  • Property
  • September 20, 2016
  • Sarah Dunn
How to open a store, part 1: Property

Let’s pretend that I’m going to open my dream retail store. It’ll be a shameless replication of the greatest idea anybody’s ever had – Café de Comics, a Korean franchise which combines cat café and comic shop in locations across Seoul. Customers get to settle down with a coffee in one hand, a hefty trade paperback in the other, and a cat sleeping peacefully beside them. Look out, Heroes for Sale, here comes Scribble Kitty!

To make this utopian vision a reality, I’ll first need to make a lot of decisions. Not just around exactly how fast I can obtain each new issue of Brian K. Vaughan’s Saga or whether to adopt adult cats or kittens, but:

  • Where will we be located?
  • How will I fund this?
  • What if something terrible happens?
  • Where do I start with technical issues, like payments?
  • What about ecommerce? (After all, some people are allergic to cats.)

I’ll take you with me as I ask every question you were afraid to ask about opening a retail store, and probably a few more.

Property

More and more new retailers are opening pureplay ecommerce sites before committing to bricks and mortar stores. We’ll explore this option in the ecommerce section, but for now, let’s assume I’m diving in at the deep end and opening Scribble Kitty as a physical store.

The fundamental question retailers need to answer before selecting a site, Lloyd Budd of Bayleys says, is: “Who are your customers?”

“You have to understand how your customer engages with your business before you choose a location.”

Different locations suit different businesses, and a perfect location for one kind of retail store might be the death of another. Your business might only be relevant to people who earn over a certain amount, or people of a certain age group.

Once your customer base is identified, you can get down to the task of finding out where they live, work and shop, and then position your business there. Budd says Bayleys uses data to help with these decisions.

For example, say you’re seeking a catchment area of at least 5,000 people with a spending power of a certain number. It’s possible to put that brief into a property search, highlight key areas, and then search more closely within those areas. Further considerations are the amount of public profile required, parking, storage space, whether any other business is sharing the space, and whether there are any restrictions on the use of the building that may rule out your business as a tenant.

Some tenants require a high-profile frontage, says Budd, and others can handle being tucked away in the middle of nowhere because they’re online or have a dedicated customer base who will come to them. Often, low-profile stores will be part of a portfolio strategy in which a retailer will have just one flagship store with lots of profile and signage, but support its less-prominent outlets with other productivity online.

Once a site has been identified, it’s time for a site inspection. There’s a lot to consider, says Budd: “You’re making this decision for three years, five years, 10 years, the duration of a lease.”

The impact of the store frontage is key, as the store’s overall size is not necessarily the whole story. A store that’s got a five metre frontage and is 20 metres deep is less valuable than a store with a 10 metre frontage and is five metres deep.

Visiting a store in person also allows you to make a judgement call on the amount of natural light it gets. The direction and amount of sunshine is important, says Budd - for a cat café like Scribble Kitty, which incorporates a food and beverage offering, the daylight angles must be right for the time of day that customers will be visiting.

Bathrooms for customers and staff are a tricky area, Budd says. Regulations around having or not having a bathroom are governed by local councils, which consider the size of the retail space and the number of customers.

When it comes down to negotiating the lease, Budd recommends retailers go bold. The price of the rent and the length of the lease are the two crucial points, but Budd says he personally would also ask the landlord how much incentive they’re willing to provide to get them to lease the space.

“They’re not questions that are asked often enough,” he says. “Tenants should be asking, ‘If I sign a longer lease, will you give me a bigger incentive?’”

For 80 percent of the retail market, Budd says, it’s appropriate to budget around 8 – 12 percent of the businesses’ turnover towards rent.

This story originally appeared in NZ Retail magazine issue 745 August/September 2016

​ ​

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.

 

The Retail Hotlist: Blackbird Goods is 'Best provincial retailer'

  • News
  • August 15, 2018
  • Sarah Dunn
The Retail Hotlist: Blackbird Goods is 'Best provincial retailer'

Back in June, we celebrated retail's best and brightest with NZ Retail and The Register's first-ever awards: The Retail Hotlist. We've been sharing the stories behind the winners for a couple of months now. Read on for the last installment in the series: Blackbirds Goods of Napier, who won 'Best provincial retailer.'

Read more
 
 

Cocavo expands 4,000 stores further into the US

  • News
  • August 14, 2018
  • Courtney Devereux
Cocavo expands 4,000 stores further into the US

Whangarei founded company Cocavo has recently extended into over 4,000 Walmart stores in the US. We spoke to CEO of Cocavo, Chris Nathan, about what it takes to roll out the humble New Zealand product further into international markets.

Read more
 
 

The Retail Hotlist: 'Retail visionary' goes to GoodFor's James Denton

  • News
  • August 14, 2018
  • Sarah Dunn
The Retail Hotlist: 'Retail visionary' goes to GoodFor's James Denton

We've been sharing the stories behind each winner of our awards programme, The Retail Hotlist. We're nearly at the end of the list - but first, read how James Denton from packageless grocery start-up GoodFor was named 'Retail visionary'.

Read more
 
topics
Town centres
A positive retail environment over the past 12 ...
Amazon Arrival
Keeping up with all things Amazon as it ...
The Retail Yearbook 2017
As we battle our way through the busiest ...
Hospitality enhancing retail
Some think food and integrated hospitality offerings will ...
The future is bright
We spoke with four retailers in their twenties ...
Spotlight on signage
At first glance, the humble in-store sign might ...
Red Awards 2016
The Red Awards for retail interior design celebrate ...
How to open a store
Sarah Dunn considers what it would take to ...
Auckland Unitary Plan
Auckland is changing. The Unitary Plan will decide ...
Retail in heartland New Zealand
Retailers keep the regions pumping, but how strong ...
All things to all people
Kiwi retailers share their omnichannel strategies.
Rising stars
Retail's top young achievers.
Delivering on your promises
The sale isn't over until your item is ...
Sisterhood
Women in retail help one another. We spoke ...
The changing face of retail
Shifting demographics are creating big changes in New ...
The retail yearbook
With the help of experts in the retail ...
Retail rogues
We put the spotlight on staff training. Jai ...
Here come the giants
Topshop has arrived in Auckland’s CBD, David Jones ...
Loyalty in the digital age
How are retailers maintaining loyalty? Sarah Dunn, Elly ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
From retail to e-tail
Ecommerce has become part of the way mainstream ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...
 

Menulog introduces people's choice to online restaurant awards

  • News
  • August 13, 2018
Menulog introduces people's choice to online restaurant awards

Technology has aimed to add convenience to all parts of life, food delivery included. As our nation's love for dining out and ordering in has meant food delivery providers have had to keep up with increasing demand. Menulog, for example, has included a new people’s choice vote in its winter Restaurant Awards.

Read more
 
 

The Retail Hotlist: Cecilia Robinson is 'Most influential in retail'

  • News
  • August 13, 2018
  • Sarah Dunn
The Retail Hotlist: Cecilia Robinson is 'Most influential in retail'

The Retail Hotlist is The Register and NZ Retail's awards programme. Following the launch in June, we're now sharing the stories behind our winners. This time, Cecilia Robinson, winner of 'Most influential in retail', talks My Food Bag, future predictions and management.

Read more
 

Vote and win: Vote for our cover in the People’s Choice awards

  • News
  • August 10, 2018
  • The Register team
Vote and win: Vote for our cover in the People’s Choice awards

The NZ Retail and The Register team is excited to announce that we’re one of 12 finalists to win the Magshop People’s Choice Awards for the best magazine cover of 2018. We need your help to get to the finish line, but your support won’t go unrewarded: there’s a prize pool for voters totalling more than $3,300.

Read more
 
Next page
Results for
Topics
Jobs
About us.

The Register provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

Advertise
The Register

editor@theregister.co.nz

Content marketing/advertising? Email anita.hayhoe@icg.co.nz or call 022 639 3004

View Media Kit

}