This Mini Case Study on Retail Store Locations features publicly traded companies that (at a glance) seem to be doing a good job with their brick and mortar retail locations.
Now keep in mind…
This quick case study is only based on my anecdotal experience, so you’ll want to take the results with a grain of salt and compare and contrast them with other sources of information, okay?
One of the best parts about living downtown in a big city like Toronto is that there is always something happening. Urban change is always underway. And in big city centres there are always corporate giants looking for opportunity, and planning their next move.
So it’s fun and educational to see how companies are making the most of retail space given this changing landscape. And that’s what inspired me to share this little case study on retail store location.
Mini Case Study on Retail Store Location – Royal Bank of Canada:
Royal Bank of Canada (NYSE:RY, TSE:RY) is Canada’s largest bank. And yet I think most Canadians would agree that TD Bank (NYSE:TD, TSE:TD) is the retail favourite. Those TD Green Machine ATM’s are everywhere! But…
As this mini case study will show, that might be changing. At least on the streets of Toronto.
That’s because while walking around downtown Toronto I’ve noticed something…
RBC seems to be pursuing a new strategy.
It looks like they are making a dedicated effort to build branches underneath new condo developments. That’s a smart retail location strategy, right?
I love the economics of putting a store under a condo because you are guaranteed to have thousands of potential customers going by your front doors every single day. It’s a pretty captive audience you should be able to milk a regular profit from (assuming you didn’t overpay for your location).
But don’t just take my word for it.
Look at some of these photos I snapped while running errands over the last week:
Mini Case Study on Royal Bank of Canada Branch Locations (Photos):
This new condo near Bay and Dundas is right in the heart of downtown. It’s a very busy intersection and there are more buildings going up in the area. This new RBC branch seems very well-positioned:
The next day when I was walking up Yonge Street, I also noticed that RBC was staking out some territory underneath another new condo development. This building hasn’t even started going up yet. But RBC has already staked their claim:
Finally, downtown Toronto is home to (what will be) the tallest condo tower in Canada. And while you can’t see it in this picture, RBC has staked out a prime location on the ground floor:
It’s also worth mentioning that Bed Bath and Beyond (NASDAQ:BBBY) has a location under the Aura Tower above. And remember, BBBY is a well-run and well-managed retailer, so if this is a location they have prioritized, I am seriously paying attention.
Just think about it, there are bound to be thousands of people living in that building who desperately need bedding and banking. Additionally…
(And maybe this goes without saying)
Starbucks (NASDAQ:SBUX) has also done a great job cornering the condo market. Every time a new condo development is built, there are seemingly 2-3 Starbucks opening on each of the street corners nearby. Admittedly, you could also just argue SBUX stores are everywhere.
Either way, it’s neat to walk around and catalog the companies that are doing a good job executing their retail store location strategy. It’s also a good distraction if you get bored form shopping.
Anyway, I’m curious:
I wonder if these companies are doing a good job growing their footprint in Toronto only, or if the same is true in your neighbourhood as well. So…
If you have any observations of your own please let me know in the comments below!
Retail Store location Case Study Wrap-Up:
I hope you enjoyed learning from this quick case study. Of course these photos aren’t conclusive one way or the other. Retail store location might be an indicator of management skill. But without knowing how much the locations cost to set up and operate, it’s hard to get an accurate estimate for the shareholder value they create.
Nonetheless, it’s one more indicator that’s easy to keep an eye on. And it makes running errands around town a little more interactive. When you combine these anecdotal observations with accurate price target calculations you can start to get a sense of whether or not a company is worth investing in.
So while it seems like the finance and accounting job market is strong, RBC should continue to ride these tailwinds and conquer urban market share with this smart retail store location strategy.
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