Why Location Matters in Retail: A Critical Decision for Success

Mackenzie O'Neal
Jan 7
2 min read

In retail development, the age-old mantra “location, location, location” isn’t just a cliché—it's a business imperative. For retail tenants and investors alike, where a store or shopping center is built often determines everything from foot traffic to sales performance, long-term viability, and overall return on investment.

1. First Impressions Start with Foot Traffic

Retail success begins with visibility.

Studies show high-traffic locations dramatically increase exposure for retail businesses.

For example:

Stores on prominent corner sites can receive up to 30% more foot traffic than mid-block locations.
Retailers near a major grocery anchor benefit from ~20% more pedestrian visits.
Transit-oriented developments often generate 40% more walk-in traffic for coffee shops or quick-service retail than non-transit areas.

For landlords and tenants alike, these statistics reinforce what every retail planner knows: if people aren’t passing by your doors, it’s much harder to convert them into customers.

2. Accessibility Doesn’t Just Affect Shoppers—It Shapes Sales

Not all foot traffic is created equal. Convenience plays a large role in retail selection:

According to the National Retail Federation, 74% of consumers say convenient location is the most important shopping factor when choosing where to shop.

That includes features such as:

Ample parking
Easy access to public transportation
Pedestrian-friendly streets

A site that’s difficult to reach, even if it’s near your ideal customer base, could underperform simply because shoppers choose easier alternatives.

3. The Right Demographics = Better Market Fit

Retailers succeed when they’re near the customers who want their products.

Location decisions must reflect demographic realities—including population density, age profiles, income levels, and lifestyle preferences. A high-end boutique located far from affluent neighborhoods may struggle, while a convenience-oriented store in a densely populated area with heavy commuter traffic can thrive.

In practice, this means integrating demographic analysis into early site selection to ensure that the chosen location aligns with your target customer base.

4. Competitive Landscape Influences Long-Term Performance

The retail location strategy isn’t just about attracting customers—it’s also about positioning within the competitive ecosystem.

Being close to complementary businesses can create clusters of activity that benefit all tenants, while oversaturation with direct competitors can dilute sales and slow growth. Thoughtful placement that considers competitive and synergistic relationships can dramatically improve rent performance and tenant retention.

5. A Good Location Enhances Retail Longevity

Finally, location isn’t just a short-term sales booster—it’s a long-term asset. Strategic positioning:

supports stable tenant occupancy
increases property value
reduces vacancy rates
and can help tenants sustain revenue growth over time.

Retail centers that integrate community traffic patterns (e.g., near schools, parks, transit hubs) often become integral hubs where people want to shop—not just need to shop.

Why This Matters for Retail Construction

For developers and retail clients, the decision about where to build is just as important as how the building is built. At Mid-States Construction:

We begin every retail project with a careful look at site accessibility, visibility and compatibility with long-term customer behaviors.
Our teams work collaboratively with urban planners, real estate advisors, and retail strategists to establish the right foundation before a shovel ever hits the ground.

The best buildings come from the best sites. Choosing the right retail location isn’t luck—it’s strategy.

Ready to discuss your next retail project and site strategy?