Site selection for small retail stores using sustainable and location-driven indicators : Case study: Starbucks coffee shops in Los Angeles

Site selection decisions remains a complex yet crucial process for strong business performance. Despite the extensive number of publications in this field, the emergence of new data collection technique, improved location analytics, and changes in consumers’ preferences call for testing of new models and hypothesis. This study compares traditional site selection indicators (e.g. property size, proximities, competition, and demographic profiles) with novel site-selection indicators (e.g. environmental sustainability performance and socio-demographic characteristics from Tapestry data). By investigating a case study of Starbucks coffee stores in Los Angeles, we argue that environmental sustainability performance and socio-demographic Tapestry segments correlate with business performance indicators of small retail shops in two ways. First, higher sustainability scores result in increased foot traffic, and by extension increased business performance. Second, Tapestry segmentation stands as significant indicator of business performance in site selection modeling – specifically, by demonstrating the significant correlation between socio-demographic consumers’ segments and the number of visitors per location. The output of this study offers an alternative location-driven site selection method, important for businesses and key industry-players in sharpening location-allocation decision-making processes