Choosing your retail location: what can be measured

The vocabulary: 1A, 1B, 2

Retail grades locations into categories. 1A designates the best addresses in a city: the main pedestrian street, maximum flow, the highest rents on the market. 1B designates the adjacent streets, still very busy but markedly cheaper. 2 covers neighbourhood, outskirt and side-street locations.

This classification is not standardised: it varies from one city to another and is negotiated in listings. It remains useful for one reason: it is a reminder that rent buys flow, and that paying 1A for an activity that does not need flow is a misallocation.

Footfall is measured, not estimated

Pedestrian counts exist in several Swiss cities and are often public. Station usage is published by the SBB in travellers per day. Road traffic is recorded by permanent counters as average daily traffic. These three sources give a defensible order of magnitude — something no one-hour observation will provide.

Failing that, a manual count remains possible: fifteen minutes at three different times of day, on two different days including a Saturday. The protocol matters more than the precision.

A high flow is only worth something if it matches the intended customers. A commuter station generates considerable flow that buys neither furniture nor shoes.

Visibility and access

The shop-window frontage, the orientation (a south-facing window bleaches the stock, a north-facing one does not catch the eye), the street corner, the dominant direction of movement and any obstacle in front of the entrance weigh as much as raw flow. A unit on the corner of two busy streets is structurally worth more than a mid-street unit with the same flow.

Access is judged on three counts: parking spaces less than two minutes away, a public transport stop less than three minutes away, and ease of delivery. That last point rules out whole units for an activity that receives pallets.

Anchor stores and the agglomeration effect

Proximity to a large food store, a post office, a pharmacy or a school generates regular flow that a neighbouring business benefits from without paying for it. That is the anchor effect.

The agglomeration effect goes further: for some activities, the presence of nearby competitors increases turnover instead of reducing it, because it creates a destination. A street with three opticians attracts more customers per optician than a lone optician. The effect is strong for comparison shopping — clothing, footwear, furniture — and weak for convenience shopping.

The warning signs to check before signing

The first three points can be checked at the planning office and in the municipal council papers, which are public. The fourth appears in planning applications. The fifth is counted on foot.

• Roadworks or a street redesign scheduled over two years.
• A one-way scheme or the removal of parking spaces in the municipal mobility plan.
• Abnormal turnover of shopfronts at that address: three occupants in five years is a verdict.
• A shopping centre planned within the catchment area.
• Visible retail vacancy in the street, measurable by counting empty windows.

The price is judged as a share of turnover

Comparing two units in francs per square metre says nothing until the expected turnover is in the equation. A unit at 45 francs per square metre on a high-flow street may represent a lower rent-to-turnover ratio than a unit at 18 francs with no passing trade. The right unit of comparison is the annual rent relative to forecast turnover.