Location, Location, Location: Where to Put Your Retail Store

by Rhiân Davies | Published on May 18, 2022

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smiling young woman standing behind the counter in a cafe

Image source: Getty Images

Choosing the perfect location for your retail store requires careful consideration. Here is some food for thought about several types of retail locations.

Online retailers enjoy the benefits of being able to sell from anywhere at any time, but one of the biggest retail challenges for a brick-and-mortar merchant is knowing how to choose the best location for their store.

Ultimately, the retail store location you choose can make or break your business. The site you pick will largely be dependent on your budget and business type, but there are many other factors to take into consideration.

Let’s go through four types of retail locations, as well as the factors you need to consider to help you choose the right location for your business.

The 4 different types of retail locations to launch a store

  • Shopping malls
  • Popup stores
  • Strip malls
  • Main Street

1. Shopping malls

Although shopping malls come in all shapes and sizes, they all have one thing in common -- they host many different types of stores under one roof.

Malls continue to draw large numbers of customers due to the variety of retailers they can access in one trip. Malls offer customers a well-rounded retail experience since the majority of them are also home to other amenities, such as restaurants, bars, cinemas, game arcades, and more.

Typically, shopping malls contain a few anchor stores (a retail term for major retail stores) that serve as one of the main draws for customers and also drive foot traffic to smaller retailers.

Advantages of shopping malls as a retail location:

  • High level of foot traffic
  • Customer parking is readily available
  • Less marketing spend is needed to draw customers into a store
  • Offers a “one-stop-shop” customer experience

Disadvantages of shopping malls as a retail location:

  • Direct competition from nearby stores
  • Rent and maintenance costs can be high and unpredictable
  • Retailers are subject to mall regulations and rules

2. Popup stores

Popup stores are temporary and are commonly used by retailers with an existing presence as a means of exhibiting new products or introducing their business into a new geographical area.

As a retail management strategy, popup stores are a great way of generating excitement around new products, concepts, or brands, and they are also an effective means of testing the water without committing to long-term rent or buying retail space outright.

Pantone branched out into the popup cafe space by serving food and beverages branded with its signature color swatches. Although this was a step outside of its usual business model, the popup cafes were perfect for attracting the public’s interest and generating brand publicity.

A colorful Pantone cafe on the beach.

Pantone branched out into cafes to generate buzz and publicity. Image source: Author

Advantages of popup stores as a retail location:

  • More affordable, with no long-term rental necessary
  • Chance to test the market before committing to a retail location
  • Creates brand awareness
  • Novelty idea generates buzz and excitement

Disadvantages of popup stores as a retail location:

  • Takes time searching for the right location
  • Customers may be hesitant since you may not yet be a trusted brand
  • The amount of inventory you can store and display will be limited

3. Strip malls

Over the past few years, the suburban location of strip malls and their typical mixed-use facilities have been growing in popularity as a site of choice for larger retailers. Even department store giant Macy’s is expanding into strip malls with a new store concept called Market by Macy’s.

Since strip malls tend to house a variety of businesses -- usually gyms, retail shops, hair and nail salons, dry cleaners, and small restaurants -- they are seen to represent another type of “one-stop-shop” customer experience by unifying retail needs and task-based services in one place.

Advantages of strip malls as a retail location:

  • Open-air format gives retailers visibility
  • Cheaper to rent than shopping malls
  • Reliable customer parking access

Disadvantages of strip malls as a retail location:

  • Foot traffic is likely to come only from a very local demographic
  • Customer base is mostly car-dependent
  • Rent and maintenance fees can be fairly steep

4. Main Street

Main streets and downtown locations are often desirable areas for retailers due to being focal points for residents of towns and small cities. Retailers located on main streets also typically enjoy more control over what they can do with their retail space.

A city’s main street lined with retail shops.

Main Street retailers are convenient for attracting passing trade. Image source: Author

Advantages of main streets as a retail location:

  • Access to a diverse customer base
  • Well-known and established location
  • Customers are often loyal to their local retailers

Disadvantages of main streets as a retail location:

  • Lack of customer parking
  • Customers sometimes need more variety than what a main street can offer
  • Commercial rents tend to be high

What to think about when choosing a retail store location

When opening a retail store, choosing the perfect location is one of the most important decisions you will make. However, there are more factors to consider than just its actual physical location. Here are a few factors to think about before landing on a location.

Business rates

Rent is at the top of each retailer’s mind, but there are other costs to consider, too, including average utilities costs and taxes, as well as other “hidden” costs, such as deposits, parking, and maintenance costs. Make sure to research the average business rates in any retail location before signing on the dotted line.

Lease terms

There are many factors to consider before you sign any lease. One of the most important factors is the length of the lease.

While signing a lease for a longer period of time helps secure the price, you don’t have as much flexibility. Conversely, signing a shorter-term lease gives you more flexibility but opens you up to increases in rent should you decide to stay. Always have your lawyer look over any lease contract before signing it.

Footfall and customer profiles

What’s your ideal customer profile? Do they live in the area of your preferred retail location? If not, there’s very little use in choosing that location, no matter how low the rent might be.

Choosing a retail location involves striking a good balance between ideal customer profiles and general foot traffic.


In almost any retail location you choose, you’re sure to have competitors nearby. What do your future competitors do well, and how can you effectively compete with them? Can you try a click-and-mortar or BOPIS business model to attract more customers?

Necessary repairs and modifications

Will you need to foot the bill for any repairs to the building before you can start selling? Tearing down walls and rewiring buildings will eat up a significant portion of your budget. And don’t forget to check beforehand how much certain modifications, such as adding your branding to your retail storefront, will cost.

Zoning restrictions

Last but not least, check out the zoning restrictions and laws in the area before you commit. For example, there may be parking restrictions, business and land use requirements, and rules about what types of products can be sold there.

In a digital world, location still matters

Although customers have more choice than ever before, the data tells us that customers still value their in-store shopping experiences. Doing your research before choosing the right retail location is not only beneficial for you, but it will help you find the perfect spot to delight your customers, too.

Technology also continues to drive retail innovation efforts. With so many customers looking for a seamless omnichannel purchasing experience, retailers are turning to retail management tools to help bridge their online channels with their physical stores and offer customers more convenient shopping options.

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