Anchors and Market Feasibility

Written by  //  March 12, 2011  //  Retail Feasibility  //  1 Comment

retail market analysis & home depot

“Anchors” are large retailers (or clusters of similar stores) which are capable of attracting a significant inflow of customers. As the name implies, anchors ground a project within the competitive retail landscape and help define the overall role and function of adjacent retail. Traditional anchors were department stores, but more and more anchors are single brand retailers. An overview of the various categories of anchors can be found here.

As anchors literally can make or break a retail cluster, they are the best place to begin when considering market feasibility. There are only a certain number of anchor stores operating in any given market, and each has fairly stringent requirements about locations in terms of households within a certain drive time and proximity to one another. As a result, anchors and suitable locations are limited.

Potential Anchor Identification Process

  • Map anchor stores currently operating in local market and calculate average driving distances from one another.
  • Identify whether any major anchors have coverage gaps in proximity near the subject area.
  • Talk with local retail experts to better understand expansion plans, site requirements, and target demographics of potential anchors.
  • Consider whether any anchors not currently operating in the market are considering entering.
  • Create list of potential anchors, as well as their respective requirements such as store size and parking.

Whether it be a regional mall or an urban shopping street, virtually every retail node requires some sort of anchor. What does change is the scale and type of the anchor. A convenience store might be appropriate for small retail street, while a 200,000 sf department store is required for a regional mall. Overall, however, the principle of driving customers to a retail node remains constant in all scenarios.

Understanding the types of anchors which will ultimately define the project provides a better understanding of future customers and prospective tenants. From here, it is possible to start building assumptions about consumer behaviour which will provide the basis for a quantitative feasibility analysis.

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Reurbanist

Reurbanist is a multi-disciplinary firm that blends land use economics with urban planning and economic development. At its core, Reurbanist believes that great urban places that are compelling and vibrant must find success at both a fiscal and social level. Stronger cities and urban destinations translate into improved job growth, municipal tax revenue, and a higher quality of life for residents.

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