Growth Potential of Retail Trading Areas

Every retailer must answer one more question before completing the trading area evaluation process. That is what holds for the future for the retail trading area ? In other words he is to foresee the growth potentials of trading areas. It is because, the marketing opportunities can change quickly or dynamically growing trading areas might turn either static or decline. The retailer either must fight to maintain present market share or be willing to survive on a smaller share without future growth. However, with the growth, the retailer has an opportunity to expand sales and market share at a reasonable amount of cost and effort. Therefore, the final step in evaluating a retail trading area is to determine the areas future growth.

The retailer can very often learn what to expect by examining future conditions because, the future of a retail trading area is an outgrowth of past and present conditions. Visual observation of an area is a simple method of looking into the future. Though it lacks scientific methodology, visual inspection of current activities can produce a useful picture of future. While projecting the future picture, the retailer should give due weightage to the following factors:

  1. New and expanding residential areas combined with older, stable neighborhoods provide a solid base for future growth.
  2. An expanding commercial or industrial base signals growth opportunities.
  3. A good balance between item number one and two cited above reflects a stable growth rate that avoids over-dependence on limited economic activity.
  4. A well developed transpiration network as well as proposed future transportation networks in the trading area contribute to a trading area’s growth.
  5. An involved local government that takes an interest in residential and business development is a great asset.
  6. A progressive social and cultural environment is a healthy climate such as theaters, museums, zoos, parks and so on. 

Bookmark the permalink.