Why do so many people make mistakes in location? -What is trade area analysis? :Chapter 2

This report analyses the Japanese market.

Chapter 1: Examples of mistakes made by restaurant owners. This is a continuation of the correct sequence to opening a restaurant.

In general, many people, both city-centre and suburban, fail in terms of location because they seek locations that are too busy with pedestrian traffic, or too busy with cars, or too crowded with rivals and too competitive.

The best strategy in business is to win without fighting, and competing is not the smartest thing to do.
The wisest way is to select a location where there is no competition and you can win on your own.
The only businesses that have survived for a long time and are still thriving and successful are those that are free from competition, and it is absolutely essential to be free from competition when selecting a location.

1. the location is not set up from the customer's point of view.

I sometimes wonder very much why they set up store in such a location.

I see the following examples in suburban stores where you have to come by car.

1.It is near a traffic light, which makes it difficult for cars to enter and exit because the light is in the way.
2.Suburban stores that do not have enough parking spaces and do not balance the number of seats with the number of parking spaces at all. In most cases, the required number of parking spaces is estimated to be small in relation to the number of seats. If parking spaces were available, customers who park in the parking lot would line up at the storefront, but in most cases, they cannot get in because there are not enough parking spaces. Thus, the parking lot is always full, but the store is always empty. When the parking lot is 80% full, it looks full to the cars driving by, so if you want to keep it completely full, you need a traffic guard.
3.The store is located along a main road, where speeds are high, so it is impossible to stop even if one notices the store’s presence.
4.The company has opened a small, inconspicuous, small-sized store along the main road.
5.The store is located in a place where there is always traffic congestion, making it impossible to enter even if one wanted to.
6.The shape of the parking lot makes it difficult to enter the store by car, even if one wanted to.
7.The width and length of the parking lot are small, making it difficult to park. If there is an accident in the parking lot, customers will never come back.
8.The parking lot is too far away from the store, so customers have to walk a long way after parking their cars.
9.Some shops consider nearby coin-operated parking lots as a substitute for their own parking lots, but these coin-operated parking lots are sometimes full, so they cannot be used as parking lots for the store.
10.If they had a parking lot, they could easily increase sales and make a profit, but many stores are stingy with parking fees and sacrifice sales even when there are parking lots nearby that can be rented.

2. Some people open their stores by relying on the parking lots of nearby supermarkets or convenience stores, but this is a problem and should never be done.

Next, in the case of a walking trade area targeting customers who come on foot, the following problems can be observed.

1.Since the store is located along an arterial road, the number of customers within the trade area is not sufficient, since traffic is heavy but people on the other side of the arterial road are not expected to be there. (Walking trade area, without parking, is possible when the daytime population in a 500m radius is 20,000 or more, and arterial roads, railroad tracks, and rivers divide the trade area, so care should be taken along arterial roads, in front of stations, and along rivers.)
2.Many people mistakenly believe that station fronts are well-located because they have a lot of pedestrian traffic. Station fronts along lines outside the Yamanote Line and local station fronts are basically for commuting to school and work, so the population in front of stations during the daytime is never large. (Real estate agents who do not understand the best locations for noodle businesses often recommend station-front locations or stores along main roads.)
3.The location depends on whether the store is a quality oriented store that focuses on products and service or a casual store that does not.
4.Basically, you should never open a store on the second floor or in the basement where there are stairs, but many people fail to do so.

The above problems can be easily answered by calmly considering whether or not they would be satisfied if they were in the position of a customer, but many people tend to compromise when they are in the position of being a party and opening a store.
It is important for those who open stores to be more consistent and not compromise.

3. Thanks to the Internet and SNS, the importance of location has decreased, and past experience and common sense are no longer useful.

Before the development of the Internet, Sanuki udon once enjoyed a boom in Kagawa Prefecture.

A local magazine, “Sanuki Udon: The Terrible Sanuki Udon,” featured only udon restaurants located in remote areas that could not be found without looking around. However, this sparked a boom in the udon eating craze, with many people from all over Japan flocking to Sanuki udon restaurants in search of udon stores in remote areas. More recently, with the development of the Internet, customers spread the word about udon stores on social networking services. In addition, Google Maps displays a map of the area, so no matter how remote the location, it is always possible to reach the restaurant.

Since navigation systems have changed from car navigation systems to smartphone navigation systems, it is now possible to find a store even while walking. As a result, for quality-oriented stores that are particular about their products and services, good or bad location is no longer an issue, as it has been in the past.

For convenience-oriented stores that are not concerned about product quality or service quality, a convenient location is still essential for customers to visit, so they need to be located in front of a station or in a crowded area.

A typical example is the standing noodle and buckwheat noodle store. Basically, standing noodle and buckwheat noodle stores are only viable in front of stations along the Yamanote Line, where the rent is as high as 60,000 yen per square meter or more, but it is impossible for ordinary new entrepreneurs to obtain such a property.

4. Real estate agents do not know the best locations for udon noodle stores and ramen stores.

It is impossible for a real estate agent to understand the best location for a noodle business when the optimum location for a noodle business is about to change dramatically in the changing times.

Real estate agents deal with commercial properties for all kinds of businesses.
And udon noodle stores and ramen noodle stores are a very minor part of the commercial properties handled by real estate agents, and are by no means a major sector.

Therefore, it is impossible to ask a real estate agent to find the best location for an udon noodle store or ramen store, and the real estate agent will recommend the best location for an average business.
As a result, they recommend a location in front of a station, a busy location, or a place with high rent.
In this day and age, it is unthinkable to ask a real estate agent, who is not an expert on the best location for a noodle business.

Continue to Chapter 3: The Essence of Successful Noodle Business Locations.

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