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The Location Strategies of Commercial Formats


The Location Strategies of Commercial Formats

By Jim Simmons and Gabor Zsigovics

This is the third in a series of papers that describe Canada's national commercial system, which can be defined as the set of all commercial locations in the country.  The first two papers use the postal code FSA as the spatial unit of analysis, and the store as the measure of commercial activity.  In the first instance, the level of retails and the change in sales in each FSA was described as a function of the amount of retail space of various kinds provided.  The second paper examined the combinations of store types and commercial formats found in each FSA, to build typologies of commercial activity.  In both instances, the FSAs were found to be unsatisfactory units of analysis because they do not conform to the spatial markets or commercial groupings as they are recognized  by either consumers or commercial firms.  For example, FSAs subdivide market realities such as urban areas, but do not coincide with the actual commercial groupings within cities such as downtowns or arterial strips.

This paper focuses on a more aggressive spatial unit, the urban market, as a useful level of analysis for the study of multi-locational commercial firms and their formats.  In brief, the paper describes how the stores of more than 4,600 commercial formats are allocated over the 137 urban areas defined by Statistics Canada, as well as the 11 residual rural areas that can be defined for each province and the territories.  These spatial distributions implicitly define the spatial strategy of the format: the locations chosen in pursuit of the format's business goals.  It will be seen that the spatial patterns reflect the age and size of the format, and its point of origin, as well as the type of activity in which it is engaged and the nature of the competition.

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