Where To Locate

Another issue that faced the Howards was where to put their new women's clothing shop. Marcia Howard pondered the costs and benefits of three different locations.

First was a site in the downtown area. It was on a major street with one way traffic in a block with essentially commercial tenants $($see plan A$).$ Marcia would be replacing an antique shop which had decided not to extend its lease. Monthly rent on the property was $$2000$ per month, leased on an annual basis. the landlord was unwilling to lease the space for any greater period without adjusting the rent upward.

Traffic counts in the area revealed that on an average day $1400$ cars traversed the street on which Marcia's store would be located. Also significant was the foot traffic coming off the cruise ships in the summertime. No study had been done, but Marcia could not help but be aware that the volume of visitors roaming around downtown was substantial. No shops selling women's apparel were in the immediate vicinity, although a five and ten, which had a little bit of everything was just up the street.

A second site was in North Sound Mall. The space in question was on the lower level next to a family shoe store. The site was in the middle of the mall almost directly between the two entrances on either side. Rent on the property was $$5000$ per month for a three year lease. After that time, rent would likely be raised based on the success of Marcia's venture.

The mall was clearly where the action was in town. A traffic count of people entering and leaving the structure revealed that an average day would have about $4,000$ people patronizing the mall area. Many of them shopped only at the supermarket, which was the mall's largest tenant. The supermarket had its own entrance from outside, in addition to access from within the mall $($see Plan B$).$

The mall did lease space to some competitors. A Jay Jacobs franchise sat nearly opposite to the proposed site for Marcia's store, and a shop featuring casual wear for both men and women was located on the upper level. Both seemed to be doing reasonably good business.

The final choice was a recently developed second mall in the north end of town. Phase two had just been completed, so there were ample spaces available for lease. The principle merchant in the mall was again a supermarket, but very little was known about other potential tenants, or the ultimate traffic count the mall would generate $($see Plan C$).$

The price was, however, favorable. Anxious to fill the mall as quickly as possible, the owner's offered a lease on a suitable shop for $$3000$ per month. The initial lease was to be for three years, but its terms included the option to renew for an additional three years at the same rate. The owners also promised that no other women's apparel shop would be permitted into the mall for the term of Marcia's initial lease.

Clearly, there were many things for Marcia to think about in making her decision, and she calls you on the phone to get some of your valuable opinions. What are some of the factors Marcia must consider in making her decision, and which site should she choose?

PLAN A $$ DOWNTOWN

Bookstore Vacant Dry Cleaner Video Rental Law Office Beauty Parlor

$<<<<<<<<<<<<<<<$ "Main" Street $<<<<<<<<<<<<<<<($one way$)$

Parking Lot Antiques Pawn Shop Five and Ten Antiques

PLAN B $-$ NORTH SOUND

Liquor Store Dry Cleaner Greeting Cards Vacant Shoe Store Florist Door Restaurant

Door Music Store

Deli Bank Travel Agency Hardware Jay Jacobs Video Rental Jewelry

Super Fine Arts Restaurant

Market Candles Door

PLAN C $-$ NEW MALL

Super Market Florist Video Rental Liquor Store Auto Parts

Door

Vacant Vacant Vacant Vacant Vacant