Historically, all retailers have relied on customers visiting their stores to make their purchases. So choosing where to locate its stores is very important to H&M. The market’s potential, that is to say, demographic structure, economic growth, political risk, infrastructure, purchasing power, human rights and environmental sustainability, are factors that the company has to assess before moving into a new country or city. Larger cities are always likely to be more attractive, not only because of their population size, but also because there are likely to be more fashion-conscious shoppers in their populations. Within a chosen city, H&M must also decide the exact location of an individual store. The company always aims to position its stores in the best retailing locations, concentrating on the most attractive streets and main shopping centres. This is important in ensuring that the store can attract sufficient footfall (i.e. the number of people entering) to ensure that an adequate level of sales is achieved.
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