The Cost Of A Bad Store Location

Investing in a bad store location can be a severe drain on company assets. However, finding the right location needn’t be as precarious as it once was.

You can be confident that you are selecting the right place by utilising location intelligence software. This compiles an extensive range of data, processes it quickly and visualises it in an intuitive way to give you a comprehensive overview of each prospective location.

These are the most common factors that go wrong when retailers select the site for a new store, and how you can avoid doing the same:

What do retailers get wrong when choosing a new store location?

When choosing a new location, there are many factors at play. Here are some of the oversights and issues that you’ll need to avoid when finding the right location for your new store:

● Insufficient knowledge about local demographics and their buyer preferences
● Lack of awareness about competitor store locations, and the products/services they offer
● Poor understanding of localised footfall, transport connections and planned infrastructure developments

What is the cost of selecting a bad store location?

These are just some of the costs of choosing the wrong location for your store. The total depends on the company itself, but could easily run into the millions.

● Data purchase and planning costs
● Property purchase/leasing costs
● Commercial property agency costs
● Legal and administrative costs
● Property redevelopment/fit out costs
● Cost of adapting logistical processes
● Loss of potential revenue
● Cost of searching for alternative location

How can I avoid choosing a bad store location?

Knowing that you’ve chosen the right location for your next store relies on having relevant and accurate data that can be translated into actionable insight.
Start with your own company data; current store locations, sales forecasts, staff home locations, regional logistics depots etc.

These are some of the other types of data your company should be collating before choosing a new store location:


● Where your competitors are based nearby
● Whether their location is more advantageous than yours
● Whether their products/services are more relevant to the local demographic
● What their local sales figures look like
● To what extent do local customers feel loyalty towards this brand


● Who lives in the area; their demographics and the extent to which they correlate with your marketing personas
● How customers are inclined to purchase locally (e.g. minor purchases on their commute home vs. a big weekend shop)
● What might incentivise customers to change their shopping habits

Local area

● Where high concentrations of shops are based in the area
● Where the areas with high footfall are and the times/days they’re most populated
● Where the local transport links are, and how these might change over time
Once you’ve gathered all this data, you should think about using location planning software to quickly process and visualise it in a way that’s easy to interpret, such as a digital map.

Ultimately, a bad store location could spell the end for your company, or at least make a serious dent in your overall profitability. But, with enough insight about your competitors, customers and the local area, you can find new store locations that are ideal for supporting continued company growth.
Discover how Periscope® can help you find the ideal location for your next store.