How to Decide on a Retail Location: Key Steps and Criteria

Choosing the right retail location can make or break your business. A well-located store attracts steady traffic, fits your target market, and supports long-term growth. Here’s how to evaluate and decide on the best location, plus how a commercial real estate (CRE) broker can help.

1. Define your trade area and target market

• Identify your ideal customer profile: age, income, habits, spending power, preferences.

• Map your trade area: understand how far people are willing to travel. Tools like Tango Analytics and Erply can help.

• Analyze competitors: see where others are located and identify underserved zones. Shopify’s guide explains what to look for.

2. Assess foot traffic, accessibility, and visibility

• Foot traffic quality matters more than quantity. Focus on customers who match your demographic. RetailDoc offers a good overview.

• Traffic patterns and time-of-day flows: measure pedestrian and vehicle counts during morning, lunch, and evening hours.

• Accessibility: check parking, public transit, sidewalks, and crosswalks.

• Visibility and signage: make sure your storefront is easy to see and compliant with zoning. WDG Consulting covers these details.

3. Evaluate cost and financials

• Rent and ownership costs: compare base rent, taxes, insurance, and utilities. Accruent breaks down common cost factors.

• Hidden costs: build-outs, permits, tenant improvements, and renovations can add up.

• Sales per square foot: estimate revenue potential based on location traffic.

• Lease flexibility: shorter leases offer agility, longer ones may offer stability but lock you in.

4. Understand zoning, permits, and regulations

• Zoning: make sure the property allows your business type. SBA.gov is a useful reference.

• Licensing: some municipalities require specific retail permits or signage permissions.

• Building restrictions: check fire codes, accessibility requirements, and renovation limits.

5. Evaluate co-tenancy and anchor effects

• Neighboring tenants: strong anchor tenants like grocery stores or gyms drive traffic. Placer.ai shows how to measure co-tenancy performance.

• Synergy: complementary stores (coffee shops near bookstores, for instance) attract overlapping audiences.

• Avoid cannibalization: if you have other stores nearby, check for market overlap using analytics tools such as Placer.ai.

6. Use data and analytics

• Spatial models like the Huff Model can predict how customers choose between stores.

• Heat maps: platforms like Maptive visualize demographic and traffic data.

• Scenario testing: model best, base, and worst-case outcomes for rent and sales.

7. Visit and validate in person

• Site visits: observe real foot traffic, lighting, and visibility.

• Talk to nearby merchants: get insight on sales trends and seasonality.

• Pilot testing: try a pop-up store or short-term lease before committing long term.

How a CRE Broker Can Help You

Selecting a location is complicated, and a skilled commercial real estate broker can make it easier, faster, and less risky.

1. Market knowledge and access

• Brokers know local submarkets, rent comps, and zoning details.

• They often have access to off-market listings unavailable to the public.

2. Tenant representation

• Tenant-rep brokers negotiate on your behalf, not the landlord’s.

• They help secure rent abatements, improvement credits, renewal options, and termination rights.

3. Comparative lease analysis

• Brokers use financial models (NPV, IRR) to compare sites objectively.

• They identify hidden costs and test assumptions.

4. Due diligence and risk reduction

• Brokers coordinate inspections, zoning checks, and permit verification.

• They catch unfavorable clauses early and suggest better terms.

5. Transaction management

• Brokers oversee RFPs, negotiations, and document reviews from start to finish.

• They coordinate attorneys, architects, and city officials to speed approvals.

6. Network and incentives

• Brokers maintain relationships with landlords, developers, and municipalities.

• They can help identify incentives and tax breaks tied to job creation or redevelopment.

7. Long-term planning

• A good broker ensures lease terms align with your long-term growth and exit plans.

How to Choose the Right Broker

• Focus on retail experience and local expertise.

• Ask for a track record of successful leases in your area.

• Check their fee structure to ensure it aligns with your goals.

• Evaluate their availability and tech capabilities.

If you’re unsure where to start, BrokerMatch helps connect businesses with qualified CRE brokers across the country.

Check out these helpful reads on their site:

• Looking for a Commercial Broker? Compare Referrals, Online Search, and BrokerMatch

• Need to Lease Commercial Space? Here’s How to Find the Right Broker Fast