Modelling Shopping Center Location Choice: A Shopper Preference Based Approach

Abstract

The location of shopping centres affects urban development socially and economically. Thus, appropriate location selection is critical to both developers and urban planners. Attracted by economic returns, shopping centre developers, as well as governments, have generated a boom in shopping centres in many Asian cities. Some of the investments in shopping centres are speculative, resulting in unfavourable performance after opening. This makes it necessary to use modelling techniques to investigate the factors that influence shopping centre performance.

There have been several studies on location choice model, such as location choice model for stores and service facilities, etc. However, the study of shopping centre’s location problems is still being overlooked. Some studies which are relevant to shopping centre location selection ignore management issues and attractiveness issues in a mixed form. As a result, the decisive factors in location choice remain unclear. In this study, a shopper preference based competitive location model (SPCLM) is developed to model the optimal location of a shopping centre in a given urban area. The proposed model incorporates the decisive factors of consumer’s shopping destination choices, in which consumers are hypothesised as the primary stakeholders in deciding the location of the new shopping centre. Based on individual preferences, the model is able to determine the ideal location where it can attract the maximum number of consumers or shoppers.

Four urban areas in Hong Kong are selected for modelling and parameter calibration. Also, Huff’s model is implemented and compared in the modelling process to benchmark the improvement of SPCLM. The results show that SPCLM has high accuracy improvement in most cases. An on-site survey is also conducted, so that the pedestrian flow rate at each location can be compared with the estimated total patronage share. The survey data supports SPCLM to be a useful tool in settling shopping centre location problems.

The validated SPCLM has wide applications in practice. This study uses SPCLM to test a rule-of-thumb when formulating a shopping centre location strategy. As observed in many cases, shopping centres in Hong Kong as well as in other large cities tend to locate near metro stations. The test shows that the rule-of-thumb is partially true in shopping centre location selection. For example in low retail agglomeration area, the estimated patronages near metro stations are similar. Based on the finding, a simplified method for shopping centre location selection is developed for solving real-world problems.

Date of Award	16 Mar 2017
Original language	English
Awarding Institution	City University of Hong Kong
Supervisor	Siu Ming LO (Supervisor)