SEC or street retail?
When opening a new store, most entrepreneurs face a choice: rent premises in a shopping center or prefer street retail? It goes without saying that there are pros and cons in both cases, and it is worth starting from the individual characteristics of the business.
First, let’s understand the definitions. A shopping and entertainment center is a group of different trade enterprises that are located in the same building and, as a rule, are managed as a whole. Street retail is a slightly different type of commercial real estate, namely, premises for shops, which are located on the ground floors, but have a separate entrance and personal showcases.
Pros and cons of street retail
Renting a store on the ground floor of a residential or non-residential building is a great way to maintain a brand’s uniqueness. Street retailers provide more opportunities to acquire loyal customers. With the right approach to doing business and choosing a suitable location, there are more chances to increase the attendance and profitability of the establishment. Among the shortcomings, there is a more significant dependence on the location and skills of the seller himself.
Pros and cons of the mall
A significant advantage of renting commercial premises in the mall is that its owners undertake the improvement, cleaning, security and repair work. In addition, advertising costs are significantly lower, since the shopping center is already a brand in itself, and all its components advertise along with it. Another positive aspect is the consistently high attendance. The pitfall of renting premises in the shopping and entertainment center is high competition and, importantly, many recognizable brands, the so-called “anchor tenants”, which by themselves are out of competition.
There is simply no unequivocal answer to the question of what to prefer. It all depends on the financial capabilities and goals of the tenant. For start-up entrepreneurs, the size of the rental rate plays an important role, and they are ready to start with small LFAs located in places with serious competition, while experienced businessmen with a more stable financial position invest in street retail on streets with high pedestrian traffic and the absence of competitors.