There can be a big difference in your potential turnover if you are in the busiest, higher traffic areas verses a more remote, less busy, part of a shopping centre.
It is really important to understand where you should position your pharmacy in a shopping centre as we need to seek a balance between rent and traffic.
1. Are you in a good location?
How do you know if you are in a good part of a shopping centre or strip location?
The answer will depend on your actual retail business. Sometimes a location in a high traffic area may be best suited to a jeweller rather than a retail pharmacy, as they tend to operate out of smaller, highly prominent locations where they gain the best visual exposure for their product in relatively high traffic areas (at very high rents).
It is a good idea to benchmark a centre’s traffic areas with A, B and C classifications. An A (premium) location may be a jewellery high traffic type of location.
A B (average) location may be more of a middle-of-the-road location with average traffic but larger shops with more reasonable rents and more suited to pharmacy operators.
Unfortunately, a lot of pharmacy operators are currently located in C (below average) locations because they tend to go where shopping centre owners want them to go rather than where they should be.
My advice is to do your homework to ensure you get the best possible location. You need to analyse where you need to be to ensure you have a successful retail pharmacy business.
2. How does traffic move
in your location?
You need to understand how and why traffic flow moves in a shopping centre. Assessing traffic flow can be challenging and time consuming.
Sometimes a location can be actually too busy with high traffic. You may have a lot of potential customers but sometimes they can be in too much of a hurry to stop and shop.
There are two different characteristics of traffic flow: quantity and quality.
In areas like the entrance to a train station there is a lot of traffic, but a lot of customers simply don’t stop to shop. They are just moving from point A to point B as quickly as possible with no intention of purchasing from surrounding retailers. These areas are classified as low quality traffic flows. To go into such a location may be end up being a very costly exercise.
High quality traffic flows are often found near the entry to a shopping centre food court or fresh food area. These are potentially good areas to position a retail pharmacy.
If you are in a strip location then it is important to be on the right side of the street. It may be the ‘sunny side’ or a street with a high profile retailer like JB Hi Fi. Look where people are walking and congregating; that will demonstrate the traffic flow.
3. Should you move?
You should always stay in your current location. You build up goodwill by being in the same location.
Customers are creatures of habit. They tend to park in exactly the same part of a car park and go to the same entrance. If you move to another location your customers might think you have left the shopping centre.
If you have to relocate, then you need to educate your customers for a number of weeks, and possibly months, prior to your relocation.
If you are forced to move to another location in a shopping centre by the owners, then ensure you are adequately compensated.
One of my clients has been in an existing location for many years. The centre is undergoing a substantial redevelopment.
In that redevelopment new majors and mini-majors are being introduced with over 100 new specialty shops. My client is with a strong performing national banner group.
The lessor and their representatives know my client’s business very well and they know how much of a traffic generator that business will be in the coming years. The landlord wants my client to go in a more challenged part of the centre with relatively low traffic flows and weak traffic transportation.
We know this because we have taken the trouble to exhaustively review the redevelopment plans. The lessor and their agents are doing their job to reposition my client’s business to a more challenging section.
However, we are standing our ground! We have determined where we want to go, not where the landlord wants us to go. We are making these moves at least some 18 months before the redevelopment, early in the planning process.