I just got off the phone with a women's specialty retailer who has a serious problem. Her store is located, not only in the wrong neighborhood, but also in the wrong type of shopping center. Her sales have never reached their expectation, nor will they. Unfortunately, she is probably not going to make it. In her case, the time to address this issue occurred prior to opening the store. For others, the time is now! Most retailers are experiencing the doldrums of the economy, too many retail stores and a value-oriented consumer. "If it ain't on sales, nobody buys it." Perhaps, some of the suggestions in this article can help to better define your market.
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Melaniphy & Associates, Inc. is a firm of shopping center consultants, real estate counselors, site selection specialists, market analysts, retail experts, restaurant consultants, and international investment advisors, Melaniphy & Associates, Inc. has successfully advised thousands of national and international clients in both the private and public sectors for more than 40 years.
John C. Melaniphy, company founder, has been a real estate economist and market analyst for over 40 years. During this time, he has been involved in almost every type of urban and suburban development and redevelopment problem and opportunity... Read more
Originally published in Pizza Today
A customer profile, if properly conducted, is literally a picture of your customers. The more that you know about your customers, the easier it is to pick good locations. Now you may say: "I know my customers, I don't need to do any of this." Well, let's see how much you really know.
How do you develop a customer profile? You interview a representative sample of your customers in your restaurant. Right away you are getting nervous. "Interview my customers! That is a whole lot of mickey mouse". Right? Not really! It can be very simple. First, however, let's look at the important elements and then review what to do.
What is a customer profile? Here are some items that are often included in a customer profile. They don't all have to be included; however they can be. Won't it be too long? No, not if the right physical situation exists (space at the entrance), and the interviewer knows what she is doing. Notice the SHE; that is because women usually make better interviewers than men. Simply stated, most people find women more acceptable when being interviewed.
-How often do my customers patronize my place?
-When did they make the decision?
-Who made the decision?
-Why do they come to my shop or order my Pizza?
-How many minutes did it take them to get here?
Originally published in CRE Real Estate Issues, 1991
John C. Melaniphy
published in Area Development
New manufacturing companies with combined office and plant facilities are usually more complex, since they include senior management, middle management, supervisory personnel, skilled and semi-skilled workers, and perhaps some unskilled labor. Important elements in this process are as follows:
OBJECTIVES (might include the following): Select a city where the company can become a "big fish in a small pond."
Increase the quality of labor productivity, stabilize the labor supply, and reduce employee turnover.
Improve transportation options and cost/savings.
Reduce utility costs.
Reduce corporate taxes.
Avoid excessive government regulations.
Reduce health care costs.
Reduce unemployment compensation costs
Move closer to primary markets.
Move closer to raw materials.
Improve quality of life.
Avoid environmental issues.
Improve safety and security.
Substantially reduce real estate taxes.
The primary factors included in the market study are as follow:
Distance to primary markets
Timing to markets
Accessibility to major airport(s)
B. Raw Materials
Proximity to raw materials
Many successful shopping center food courts have inadequate seating. While it can be overlooked somewhat in downtown food courts because of strong take-out business, it cannot be ignored in suburban malls. Seating to food courts is like parking to shopping centers. When you don't have it, you lose customers and sales. The total number of seats, however, is not the most important factor. Instead, the number of available tables with seating is the critical element. An occupied table, even if three seats are unoccupied, is not available seating. People prefer to sit alone or with friends and rarely share a table with strangers.
How do you determine your food court's table and seating situation? Follow these steps, designed to identify the needs in your food court, rather than relying on industry averages. Each food court has its own personality and, therefore, it must be addressed individually.
1. Count the number of tables and seats in your food court. Classify them by types of tables (i.e., moveable or fixed "twos", "fours", etc.) This is important because often the seating has changed somewhat since the food court was originally designed. You may find the numbers have changed since the food court was built.
Excerpts from "Restaurant and Fast Food Site Selection" by John C. Melaniphy, published by John Wiley & Sons, February, 1992
Food courts have become permanent fixtures in today's malls and some downtown office complexes. They are a collection of food service operators with common seating utilizing cumulative attraction of multiple, but diverse, menus. Food courts, which began in the early eighties, were promoted to food operators as a way to cut costs, increase sales, and share common elements. In theory, it has been very effective. In reality, it has been difficult for many, adequate for some and very profitable for a limited number of food companies. The recent recession has had a very negative impact on many food court operators. They discovered that their business is directly related to the success of stores in the mall and the number of customers generated. Franchise food operators were especially hard-hit because of the additional costs that they have related to the Franchisor, namely royalties and advertising contributions.
Initially, space in shopping center food courts was leased to small, independent "Ma and Pa" food operations. Developers recognized that higher rents could be charged to small independent food operators, who were grateful for the opportunity. By 1985, a clear pattern began to emerge.