Question

In: Economics

What are the advantage and disadvantages of freestanding facilities?

What are the advantage and disadvantages of freestanding facilities?

Solutions

Expert Solution

The advantages that freestanding sites have are:

--they are convenient for the customer (easy parking);

--There is flexibility because no group rules that are required to be followed in operation and larger space can be obtained;

--possibility of better road and traffic visibility;

--they have low site cost;

--they have a modest occupancy cost;

--high vehicular traffic and visibility attracts customers driving by;

--they are separate from direct competition;

--they have lesser restrictions on signs, hours or merchandise.

The disadvantages that freestanding sites have are:

--they have limited trade area since there is no other nearby retailers to attract customers interested in shopping;

--the advertising expenses may be high;

-- they have higher occupancy costs in comparison to strip centers;

--the costs such as security, grounds, maintenance, outside lighting, and trash collection are not shared;

-- majority people like variety in shopping;

--other retailers and community zoning laws can restrict an access to desirable areas


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