Selecting location for a retail business : Comparing shopping mall and down-town commercial district in Jönköping

In every market, competition is a vital ingredient for any working market economy. Large stores like IKEA, OnOff and El-Giganten are often positioned in locations near each other. Shopping areas like Gekås have proven to have large attraction power towards the customers. In down-town shopping areas it is common that large stores take advantage of each other’s capabilities to invoke customers’ interest. By doing so, businesses work together to create a large customer base. The purpose of this paper is to determine how owners and managers of medium sized retail stores should choose location for their shop. Both a qualitative and quantitative approach were used in this thesis; the qualitative approach was used for conducting interviews with 6 people involved in running the stores and municipality. This was done to collect information from actors that had the experience and knowledge about the subject of the thesis. The quantitative approach involved a survey done upon shopping habits of consumers in the same area. The reason for conducting both these researches was to diminish the biased answers that we would have got from conducting the research from one group only. By asking the store managers/owner and customers, as well as a representative of the municipality, we were able to provide a complete perspective on the situation. Our findings showed that there were some major differences between a down-town shopping area and a shopping mall. It also became clear that the preferences and capabilities of the stores were important for selecting locations. Consumer preference on where to go shop was showed to be almost the same for A6 and down-town with a slight advantage towards A6. Still, the requirements on opening a store in a shopping mall oppose down-town was different