New Store Planning Assignment I

Case Study on Hutch: Locating a New Store

Submitted To: Prof. Shalini Singh

Submitted By: Ghanak Chaturvedi JL12RM18

HUTCH: LOCATING A NEW STORE

Q1. HOW DO PEOPLE LIVING IN THE TRADE AREAS COMPARE WITH

HUTCH’S TARGET CUSTOMERS?

Hutch is targeting women in-between the age group of 18 and 40 that are in the middle &

lower income group. Fashion oriented women who are price conscious are on the mind of the

Hutch. The population level that they require is at least between 50000 and 150000.

There are two proposed locations, Dalton and Hinesville. The first proposed location of

Dalton where there is a high number of middle class workers. The carpet mills being the main

source of income, the majority of women are within the lower to middle income brackets.

Hutch also stated that they are looking to cater women who like to wear the latest trends in

fashion, and in Dalton, they would be only serving one specific ethnic group of which 92% of

them are women, an ideal situation. The population is 87,293 which are within the range of

what Hutch requires.

The next proposed location is the city of Hinesville which is an army based town like a

cantonment. Popular-priced stores generally do very well in army base towns. Income of

households of Hinesville will satisfy the trade area requirements i.e. lower and middle

income women appreciating cost effective fashion clothes. Hinesville barely meets Hutch's

requirement of population by only having 57,945 people.

Q.2 HOW DO THE PROPOSED LOCATIONS, INCLUDING THE CITIES, TENANT MIX AND THE LOCATIONS WITHIN THE MALLS, FIT WITH HUTCH’S LOCATION REQUIREMENTS?

Hutch requirements are as follows:-

The store locations should be within a 400 mile radius of its distribution centre.

It wants its stores to be located in those areas where population ranges 10000 to

50000

The trade area has to be between 50000 to 150000.

The supreme requirement of Hutch is to open the store in a strip mall or strip centre

that has space availability adjacent to an anchored store that is either regional or

national players.

Comparing the population of both the potential cities it can be seen that Dalton has more

population than Hinesville, hence a potentially larger customer base. But in the retrospect,

growth rate of Hinesville population is higher. The number of households are also favourable

in number as well as the sex ratio.

The target age group of Hutch lies majorly in Hinesville city, but comparing the retail sales

that take place and establishment cost, Dalton can be seen to be more promising for setting up

the initial business.

In view of Hutch’s requirements for the new store Whitfield square shopping centre provided

is located off the main highway approximately two miles away from the centre of the city.

This location fulfils all major requirements of Hutch for the new store.

Whereas, the location in Hinesville is Target Plaza, situated at the junction of State Route 119

and US highway. Plaza is at a prime locations but still it won’t be able to accommodate all of

Hutch’s requirements like the one in which they want to have the store adjacent to an anchor

store of the strip.

While summarising, it is understood Dalton would be better able, to fulfil Hutch’s store

requirements relative to Hinesville, in terms of population, household, household income, sex

ratio, retail opportunity. Whereas, Hinesville is fulfilling the requirements with respect to

target age group and prime location at Plaza.

Q3. WHICH STORE WOULD YOU SELECT? WHY?

The preferred store would be in Dalton, reason being this city is having maximum

competency to achieve desired requirements of Hutch. Whitfield shopping centre is at the

highway, thus having sufficient visibility.

Two vital competitors Walmart and Kroger exist, and hence will act as anchor stores for

roping in customers and the benefit of which can be taken up by Hutch. Comparing the

demographic profile of people and for attaining cost optimization, Dalton is more suitable

option to choose for opening new store as per Hutch requirements.