Omer Farooq, retail consultant & Coo Xtreem Retail, has more than a decade of experience in retail consultancy for Cash and carry stores, and has many projects under his belt ranging from small cash carry stores to retail cash & carry chains all over Pakistan.

In the last video, he talked at some length about the scope and potential of cash and carry business in Pakistan. The talk generated a lot of queries/questions about the various aspects of cash and carry businesses. The LumenSoft team, thus requested Omer Farooq to share his insights and suggestions that could help those wanting to start their own cash and carry. In this video, he focuses on one important pre-requisite for starting a cash and carry, i.e., the location of the store.

Cash and Carry Location

Whenever we start a cash and carry project, the first thing we focus upon is the store location. When our clients approach us, they either have their own space where they want to set up a store, or they want us to help them search for it. In either case, we do a detailed analysis of the location, and for this,  we consider several factors. Here is the list of the important points to take into consideration while selecting a store’s location:

1. Cash & Carry Location and the Number of Existing Stores in the Area

First of all, while finalizing a location check for the number of existing cash n carry stores in the selected location. The rule of thumb is the radius of 5 km in big cities, and 7 to 10 km in small cities. If there is no pre-existing cash and carry within this radius, you have good chances of fulfilling the need for a store.

2. Cash & Carry Location and  Access to the Surrounding Market

The area you select for your cash and carry should have easy access to the surrounding markets. This makes sure there is traffic in the vicinity of the selected locale. You can’t set up a store in the wilderness and expect traffic.

3. Road structure in the Cash and Carry Area

The road structure around the store locale should be good. The location should be approachable by major public transports. Thus, even if your location is a bit distant from the main market, the road leading to the store should have traffic on it.
Moreover, the roads leading to the store shouldn’t be dilapidated making it difficult for people to visit the store.

4. Parking Space near the Store Site

It goes without saying how important are the parking facilities for the shoppers. You need to have a parking space according to the flow you are expecting. Parking management is important so that the shoppers can park their vehicles and access the store without much difficulty.

5. Cash and Carry Location and Its Surrounding Area

It is important to take into account the happenings in the surrounding areas of the store. No matter how ideal the store location seems but if there is a junkyard nearby, or a pond of contaminated water, or an iron market causing jarring sounds, the store traffic can take the hit.

6. Store Location and the Cost Factor

The store location might tick all the right boxes but it still might not be suitable for your store if it is too expensive. If you are using a rented space, you need to compare your rental costs with your expected sales estimates. If your rental expense does not match your sales forecast, it is not advisable to select the site.

7. Building Structure of the Store

While selecting a building for the store, make sure the front of the building is visible so that the people passing by can glance inside the store. Closed buildings that only have the entrance path at the front are not suitable. Similarly, don’t select a basement for the store. However, half or semi-basement where 5 to 7 feet are above the ground is acceptable.

8. Number of Floors on the Selected Site

It is also important to take into account how many floors the selected building has. Ideally, 2 floors divided into maximum two sections are good. More floors and sections make shoppers uncomfortable.

9. Enough space for warehousing

Another important consideration while selecting the location for your cash and carry is the warehousing space. Approximately 30% of the floor space should be marked for this purpose. Thus, before you finalize the location, you need to make sure there is enough space for warehousing. It doesn’t matter which floor you select for the warehouse, you can even use the basement, but the space should be there.

In many projects, we have to reject the client-selected location/building just because there isn’t enough space for the warehouse.

Cash & Location: Questions & Answers

What would you consider as one crucial mistake one can make while selecting a location?

As I discussed above, there are many elements and all of them are important. There is no such thing as a 100% ideal location. You have to mark every element from 1 to 10 and then evaluate the average. Make sure you are scoring at least 5 to 7 out of 10 for every factor. If you score below average in almost every element the impact of your overall project is weak.

Generally, we have observed that convenience is very important for customers. For example, in one of our case studies in Multan, we noticed when service roads were constructed, roads were expanded and bridges were made, the retail businesses there went down. Our findings suggest that shoppers usually avoid the hassle of going off the route to take a u-turn and then come back.

Finalize your location by going through all the points I have discussed above. In my opinion,  there isn’t just one crucial element, it is the mix of all elements. You can take 100% marks in all the elements and inflate just one element to weaken the project. For example, if you have purchased an expensive location, or your rentals are high and do not match your sales forecast, we will term this as a major mistake.

The Next Step after Finalizing the Location

After finalizing the location, the next phase is the Design. The design includes both the exterior and interior of your shopping area. We will focus on this step in the next video. If you have any questions, do let us know in the comments section below.

Related Articles:

Cash and Carry Business In Pakistan: Its Scope and Potential

Cash and Carry Layout Design: 11 Key Elements You Need to Know

Super Victoria Store: Secrets to Successful Cash & Carry Business

Cash and Carry Store: Procurement, Product Display & Software Selection

Cash Management Mistakes by Cash n Carry Stores & How to Avoid Them