Question

2. What do you think the similarities and differences are for siting New Seasons stores vs. REI? What location characteristics might be ideal for both stores?

Answer 1

New Seasons store is a part of retail sales industry founded in 1999 in Portland which mainly deals in food items like local and sustainable food, conventional food, organic items etc. where as REI or Recreational Equipment Inc. is also a part of retail industry but it also deals with outdoor recreational services. it sells variety of items such as sports equipment, clothing, travel equipment etc. It was established in 1938 as consumer co-operative and operates in more than 150 locations.

Both new seasons store and REI belongs to retail industry so both need to have wider coverage, customer reach is very vital for both the stores so proper care needs to be taken while taking siting decision for the above two. Since REI was founded more than 80 years back so its market expansion is wide compared to new season'shaving around 20 stores, so for new season's need to have faster expansion compared to REI in order to face the growing competition.

There are several factors that needs to be considered while choosing location for retail industry. the first and most important is customer reach, if customer can easily reach the place than it will provide more sales and hence more profit. but the company must consider both short term as well as long term profit. for long term profit the company must consider the demographic condition of the location such as population etc. competition - both present competition and probable competition, cost of opening and running store, purchasing power of the population around the store, legal terms, conditions and restrictions etc. these are the similarities of siting New seasons store and REI.

But since both store deal in different types of items, there are some differences in siting decision of the above two. New seasons store exclusively deals in food items so they need to be more close and approachable to the end consumer compared to REI dealing in variety of items such as sports equipment, travel equipment etc. As REI has more stores so they have greater consumer goodwill compared to New seasons , so new seasons needs to expand market faster and be more competitive.