Site selection criteria are the written specification of what a location must have — trade area, physical format, co-tenancy, economics and portfolio fit — agreed in advance of looking at any specific address, so that enthusiasm for a particular site cannot quietly rewrite the standard. They are not a wish list and not a checklist produced after a tour. They are what you wrote down when nobody was in love with anything.
Every growing brand has criteria of some kind. Far fewer have them in a form that can be applied by someone who was not in the room, enforced when the answer is inconvenient, or revised deliberately rather than by drift. The difference shows up two years later.
Write criteria in five categories: trade area and demographics, physical and format, co-tenancy and competition, economics, and portfolio fit. Split them into a short list of hard filters that disqualify a site outright and a weighted set of scored preferences that rank whatever survives. Treating everything as a hard filter is the common failure: each requirement is reasonable alone, and the combination multiplies into an empty set.
What Are Site Selection Criteria?
Site selection criteria are a brand’s standing answer to “what does a location have to be, for us to open there?” written down before any specific address is on the table. They cover the thresholds a candidate must clear and the qualities you will trade off against each other. Their defining feature is chronology: they exist before the candidate, not after it.
That ordering is the entire point. Criteria written after you have seen a site are not criteria; they are a justification. The discipline they impose is only ever tested in one situation — when a site is genuinely attractive and genuinely non-compliant — and that is precisely when they get bent. Someone will point out that the trade area is light but the co-tenancy is extraordinary, or that the rent is over the ceiling but the landlord is offering twelve months free. Those arguments may even be right. The question is whether you are making an exception or quietly lowering the standard, and you cannot answer that without a document.
Criteria exist to be applied when a site is attractive but non-compliant. That is the only moment they cost anything, and the only moment they are worth anything.
So a workable specification needs an exception process as much as it needs thresholds: who can approve a miss, on which criteria, and what has to be true in compensation. A brand that logs its exceptions learns something. A brand that simply makes them learns nothing, because nobody later remembers which stores were compliant and which were arguments that won.
What Factors Are Important in Choosing a Retail Location?
Five categories cover almost everything that matters, and a specification that skips one will eventually be surprised by it. A site can be excellent on four and still be the wrong deal because of the fifth. Write a threshold or a rule for each.
1. Trade area and demographics
Who is actually reachable, not who lives nearby. This is where specifications are vaguest and where vagueness is most expensive, because a trade area is a definition before it is a number. Fix the drive time and the customer profile first, then set thresholds against them. See trade-area analysis for how to draw the catchment before you measure it.
2. Physical and format
Whether your prototype fits and operates: size band, frontage, ingress and egress, parking ratio, visibility, signage rights, and format requirements like a drive-thru or an end-cap. These are the easiest criteria to over-specify, because they feel objective. A 2,000–2,400 square foot band sounds rigorous; it is usually a prototype drawing mistaken for a requirement.
3. Co-tenancy and competition
Who else draws traffic to the centre, who takes it away, and which neighbours your brand cannot sit beside. State required anchors as a category with examples rather than named operators, and be explicit about whether multiple anchor requirements are all-required or any-of — that one word changes the supply dramatically.
4. Economics
What the forecast supports, not what feels affordable. A flat rent-per-square-foot ceiling is the most commonly written economic criterion and the weakest, because it ignores the revenue side. Occupancy cost as a share of forecast sales is what actually protects you, with the rent cap as a sanity check rather than the test.
5. Portfolio fit
What the site does to the stores you already have. A minimum distance from an existing unit is the blunt version; modelled overlap is the real one. See retail cannibalization analysis for why a fixed radius under-protects some sites and over-protects others.
| Category | Usually a hard filter | Usually a scored preference |
|---|---|---|
| Trade area & demographics | Minimum trade-area population over a defined drive time | Income, age skew, daytime population, target-segment density |
| Physical & format | Size band, ingress/egress, anything the build cannot work around | Frontage, patio, signage quality, end-cap position |
| Co-tenancy & competition | Prohibited neighbours, exclusivity conflicts | Anchor type, centre occupancy, competitor proximity |
| Economics | Maximum occupancy cost as a share of forecast sales | Base rent, TI allowance, free-rent period, escalations |
| Portfolio fit | Maximum acceptable transfer from an existing store | Distance to own stores, sequencing within the market plan |
What Is a Trade Area Requirement?
A trade area requirement is the threshold a candidate site’s catchment must clear — typically a minimum population, a minimum count of your target customer profile, sometimes a daytime-population or income floor — measured over a trade area defined in advance. It is only meaningful if that definition is fixed, because changing a 10-minute drive time to 15 minutes can double the population without changing anything about the site.
That is the loophole worth closing in writing. Specify the measurement, not just the number: drive time or distance, how many minutes, measured from the door, and whether the test is residents, daytime employees, or a blend. A specification that says “30,000 people” without saying over what is not a requirement. It is a negotiating position for whoever wants the deal.
What Is a Site Selection Scorecard?
A site selection scorecard is the document that turns criteria into a repeatable decision: a short list of hard filters that disqualify a site outright, plus a weighted set of scored preferences that rank whatever survives. The split matters more than the weights, and most brands get it wrong in the same direction.
Reserve hard filters for the handful of things that make a site genuinely unworkable: the box your build cannot fit, the access your customers cannot use, the occupancy cost your forecast cannot carry, the prohibited neighbour your lease will not allow. Everything else is a preference — weighted, scored, traded off. Preferences let you pick between two compliant sites. Hard filters let you stop reading.
The over-specification trap
Here is the arithmetic that catches almost everyone. Each requirement is individually reasonable. Stacked as hard filters they multiply, and a sequence that each pass a comfortable share of the market can end with a pass rate near zero:
| Filter applied | Passes on its own | Sites still qualifying |
|---|---|---|
| Everything that reaches you in a year | — | 140 |
| 2,000–3,500 sf | 31% | 43 |
| Trade-area population 30,000+ | 38% | 16 |
| Median household income $70,000+ | 44% | 7.3 |
| Base rent at or under $42/sf | 76% | 5.5 |
| Parking 4+ per 1,000 sf | 58% | 3.2 |
| At least 2 miles from an own store | 87% | 2.8 |
| Grocery anchor required | 22% | 0.6 |
Those figures are illustrative, not a measurement of any real market. The shape is what matters: nothing in that list looks unreasonable, and the last two lines take a thin pipeline to nothing at all. A specification producing under one qualifying site a year is not strict, it is inoperative, and it gets abandoned at the first attractive non-compliant site.
The fix is not to lower standards. It is to move most requirements out of the hard-filter column. A grocery anchor as a weighted preference still pushes anchored centres to the top of your ranking; as a hard filter it deletes four fifths of the market before you look at a single forecast.
How Restrictive Are Your Criteria?
Enter your real specification below, then switch requirements between hard filter and scored preference and watch the qualifying count move. The useful exercise is to find the two criteria doing most of the eliminating, and ask whether you would genuinely walk away from a strong site that missed them.
Write your site specification, then see how much of a market it actually leaves you. Every requirement is reasonable on its own; the question is what survives the combination.
The baseline: strip, grocery-anchored and power centres, mid-size units, parking fields.
Everything that reaches you in this market: listings, broker submissions, off-market looks. Used to turn the pass rate into a count you can plan against.
People inside the trade area you actually draw from — a drive time, not a ring. Set to zero to leave population unspecified.
An income floor and a rent ceiling pull in opposite directions. Holding both as hard filters costs more than either one alone.
Narrow bands are the quietest killer in a specification. Your prototype rarely needs the precision the band implies.
Parking ratios that are routine in suburban centres eliminate almost everything in a dense urban market.
Selected anchors are treated as all required. Anchored centres often carry more than one, so stacking them costs less than multiplying the rates would suggest.
A flat rent cap is the criterion most often written as a hard filter and most often better expressed as an occupancy-cost ratio against the forecast.
Minimum distance from an existing own store. A blunt radius is a stand-in for real overlap modelling, and it gets expensive fast as the portfolio fills in.
Read it as: out of everything that reaches you in a year in this kind of market, this is roughly what your written specification would let through. Preferences never disqualify a site — they only sort what survives.
Hard filters only, applied heaviest first. The bars are the honest part: each individually sensible requirement is multiplying against the ones before it.
Switch any requirement between a hard filter and a scored preference and watch the number move. The last column is what you would have if that one filter were relaxed.
Relax option: widen the band by 500 sf at each end.
Relax option: drop the population floor by 20%.
Relax option: score income instead of gating on it.
Bar length is how much of the funnel each hard filter removes, not how important it is. Greyed bars are preferences, which cost you nothing in supply. A further 6.0% is taken off for holding an income floor and a rent ceiling as hard filters at the same time.
- 1.Unit size band — 2,000–3,500 sf lets 31% of sites through on its ownWiden the band by 500 sf at each end.
- 2.Trade-area population — 30,000+ lets 38% of sites through on its ownDrop the population floor by 20%.
Tight — expect a long search. Only 1.9% of available sites clear every hard filter, about 2.7 of 140, and unit size band plus trade-area population account for most of the loss. Criteria this tight are defensible if you have the patience and the market has depth, but budget quarters rather than weeks, and decide now which single requirement you would soften if nothing surfaces by the halfway mark.
SITE SELECTION CRITERIA — WRITTEN SPECIFICATION Market type: Suburban Sites screened per year: 140 HARD FILTERS (a miss is a pass on the site) - Unit size band: 2,000–3,500 sf [modelled pass rate 31%] - Trade-area population: 30,000+ [modelled pass rate 38%] - Median household income: $70,000+ [modelled pass rate 44%] - Rent ceiling: $42/sf max [modelled pass rate 76%] - Parking ratio: 4.0 per 1,000 sf [modelled pass rate 58%] - Cannibalization guard: 2.00 mi from 3 own stores [modelled pass rate 89%] SCORED PREFERENCES (weighted, never disqualifying) - Format requirements: End-cap [found on 26% of sites] NOT SPECIFIED - Required co-tenancy: None required MODELLED RESULT Share of available sites clearing all hard filters: 1.9% Expected qualifying sites: 2.7 of 140 Also meeting every preference: 0.70 Biggest eliminator: Unit size band (31% pass) Second biggest: Trade-area population (38% pass) Verdict: Tight — expect a long search Pass rates are a modelled illustration of how restrictive the combination is, not market data.
The pass rates here are a modelled illustration of how restrictive a combination of requirements is — not market data, and not a count of real availability in any specific market. They are built from typical distributions of unit size, trade-area population, household income, asking rent and parking across available retail space, so they show the shape of the over-specification problem rather than your actual pipeline. Real availability varies by market, by format and by quarter.
Writing Criteria a Broker Can Actually Act On
A specification earns its keep when someone outside your company can screen a site against it without calling you. That rules out most of the language criteria are usually written in. “Strong demographics” and “the right kind of centre” are not instructions; they are invitations to send you everything and let you sort it.
- Make every threshold measurable. If a broker cannot verify it from a listing, a map and a data subscription, it belongs in the scored section, not the filter.
- State the measurement, not just the number. “30,000 residents within a 10-minute drive of the door” beats “30,000 trade area.”
- Say which requirements are all-required and which are any-of. Three acceptable anchor types is a different brief from three required anchors.
- Keep the hard filters to five or six. A long filter list is a short pipeline, and brokers stop sending once nothing clears.
- Name the exception path. Say what a compelling miss looks like and who decides, so near-misses reach you instead of being silently discarded.
The same specification makes a credible submission possible in the other direction, when you are persuading a landlord that your brand belongs in their centre — see the site package that wins landlords. A brand that can state exactly what it is looking for reads as a brand that knows what works.
- →Could someone outside the company apply every hard filter without calling you?
- →How many hard filters are there, and what is the modelled pass rate when they stack?
- →Which requirement would you actually walk away from a great site over?
- →Is the trade-area test written with a drive time, a daypart and an origin point?
- →Who approves an exception, and where is the log of the ones you have granted?
Let the Specification Learn Once Stores Open
Criteria written before your first ten stores are hypotheses. Once those stores have traded for a year you have evidence, and the specification should be revised against it rather than carried forward out of habit. Line each open unit’s performance up against the criteria it met or missed at approval, and look for thresholds that did no work.
Three patterns recur. A criterion every store clears is not a filter, it is a description of your portfolio, and it should be dropped or tightened. A criterion your best stores quietly fail is aimed at the wrong thing and is costing you deals. A criterion that correlates strongly with revenue should be raised and moved into the hard-filter column. The same exercise is the market share analysis most brands never run on their own estate.
That loop is what Locate’s work with multi-unit brands is built around: a revenue forecast for each candidate rather than a traffic count, the brokerage execution to sign the sites that clear the bar, and criteria re-tuned as real stores report back. For a second read on whether your specification is over-specified for the markets you are entering, talk to us. For the process that wraps around it, see how to choose a retail store location.
Written criteria will not make a hard decision easy. They make it explicit, which is the most any document can do. The brand that knows it approved four exceptions last year is in a different position from the brand that believes it approved none.
Common Questions
- What are site selection criteria?
- Site selection criteria are the written specification of what a location must have before anyone looks at a specific address: trade-area and demographic thresholds, physical and format requirements, co-tenancy and competition rules, economic limits, and portfolio-fit guards. They are agreed in advance precisely so enthusiasm for an attractive site cannot quietly rewrite the standard later. Criteria that only exist in someone's head are not criteria.
- What factors are important in choosing a retail location?
- Five categories cover almost everything that matters: trade area and demographics (who is actually reachable), physical and format (whether your prototype fits and operates), co-tenancy and competition (who else draws or takes traffic), economics (what rent and occupancy cost the forecast supports), and portfolio fit (what the site does to the stores you already have). A location can be excellent on four and still be a bad deal because of the fifth.
- What is a site selection scorecard?
- A site selection scorecard is the document that turns criteria into a repeatable decision: a short list of hard filters that disqualify a site outright, plus a weighted set of scored preferences that rank whatever survives. The split matters more than the weights. Treating every requirement as a hard filter is the fastest way to produce an empty pipeline and a scorecard everyone ignores.
- How do you evaluate a retail site?
- Run the site against the hard filters first, in order of how much they eliminate, so you stop early on sites that cannot work. Then score the survivors on the weighted preferences, attach a revenue forecast and a cannibalization read, and record the score before you visit. Evaluating after the visit is how a compelling corner ends up with a score built to justify it.
- What is a trade area requirement?
- A trade area requirement is the threshold a candidate site's catchment must clear: typically a minimum population, a minimum count of your target customer profile, and sometimes a daytime-population or income floor, measured over a defined drive time rather than a radius ring. The requirement is only meaningful if the trade-area definition is fixed in advance, because changing a 10-minute drive time to 15 minutes can double the population without changing the site at all.