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• What Is TRAC
• How were the centres classified
• Retail Locations Data
• TRAC Groups
• TRAC Classes
• TRAC Types

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The Retail Area Classification (TRAC) is the result of detailed analysis of Retail Locations’ unique database of Australian Retailing. The Retail Area Classification (TRAC) places each shopping area into one of 71 typesaccording to their retail mix

The emphasis of much retail site analysis is on the catchment area, since data is more readily available and easier to manipulate. The impact of retail mix is often either omitted altogether or relegated to the side lines.

Australian retailers have known for some time that the mix of retailing around their outlets is important to their performance. The problem has often been quantifying this impact and then being able to use it in their day to day decision making.

It is the mix of retailing which defines a shopping centre. It is retail mix which draws people out of their houses and into the centre and therefore attracts the catchment population. Clearly if there is a major imbalance between the catchment population and a centres retail mix then the retailers will not survive. It is a simple case of retail ecology – no fish = no dolphins.

Of course it is important to study the catchment area and micro store level factors, but it also vital to understand the impact of retail mix.

Since the retail mix in a centre is a result of the people which shop there, it may also be a useful gauge of the wider catchment area. Much catchment area analysis iis hindered by the difficulty in obtaining information on the day time population. The Census only details the residential population, which is of little use in assessing sites with a high number of commuters or longer distance shoppers.

This is not necessarily limited to CBD locations. A strip shopping centre on a major road may support a variety of retailing completely out of line with its residential catchment simply because of people shopping on their way to or from work. However, certain retailers may find such strips to be prime locations. The analysis of retail mix, in this case, provides a better yard stick for performance than the residential catchment. A further strength of retail mix analysis is its independence from the need to draw a catchment area on a map.

Defining centre catchments, even with a great deal of customer information, is a tricky operation. Where ever you draw a line some people are left out and these may be vital in determining the store performance. By examining the retail mix the emphasis is taken away from the academic and largely artificial catchment area and put on the types of retailers the centre supports.

TRAC groups like Retail Areas were grouped together, so that the differences within the group are minimised while each group is as different to all others as possible. The classification therefore provides a ready benchmark for the investigation of a number of retail problems including store performance, rent assessment, locational planning and competitor monitoring.

The TRAC classification is hierarchical, with each of the 71 types being allocated to one of 20 groups. Simply knowing the addresses of your stores allows you to identify which of them are in similar shopping areas and assist in assessing their performance.

The SHOPS database has been researched over the past 2 years. It contains over 270,000 outlets in 2,500 shopping centres. Each outlet is individually researched on a 12 month rolling cycle. Managed centres are updated every six months.

Retail Locations use a number of data sources. Managed Centres are approached directly via direct mail or telephone. Retailers are also contacted for their current branch lists. The retail press, journals and directories are scanned for new outlets and changes in details, as is the internet. Finally, Retail Locations are carrying out an increasing amount of field research. In the first 2 weeks of May 1999 over 50 shopping centres and strips have been field researched.

Retail Locations capture:

• The trading name of the outlet
• The address
• The activity at the outlet
• Size (if field researched)

This information is fed into the database and each outlet is classified into one of 36 Trades based on its main activity. The Trades used are detailed in Appendix A. Each outlet is allocated a multiple code if it belongs to a chain with more than 10 outlets.

A summarised version of the SHOPS database was used in the analysis. All the information for each centre was aggregated by trade, the proportion in each trade, split between convenience, comparison, and service, and the total number of outlets.

Australia's retailing encompasses a wide variety of environments, from small townships in the country, large regional centres and highly urbanised metropolitan areas. Each of these needs to be treated as a distinct type.

Each shopping area was classified into one of 4 urban types; CBD, Metropolitan, Regional and Country. These locational environments set the framework in which their retail areas operate. In Country and Regional Australia, the number of outlets needed to gain a particular significance in the retail hierarchy is less than in more urban areas. A shopping area of 200 or so outlets in metropolitan areas does not cast as long a shadow as in a regional centre.

Clearly the number of outlets in a shopping area is a strong indication of it position in the retail environment. The classification uses centre size as a coarse means of dividing centres into types. There are a number of identifiable breakpoints in the number of outlets in shopping areas. These natural break points have been used in the classification.

Although two shopping centres may be of the same size it does not hold that they contain similar retailers or have similar retailing mix. In order to gauge the calibre of retailing in each area a number of measure were used. These included

• The proportion of outlets in Convenience, Comparison and Service trades.
• The proportion of outlets in discretionary spend categories such as Books, Gifts and Music.
• The proportion of brown goods outlets (Electrical HIFI etc)
• The number of Banks
• Presence of key supermarket retailers Woolworths/Safeway, Franklins, Coles
• Presence of anchor Stores such as Target, Kmart, Diamaru, Harris Scarfe, Myers, David Jones.
• Presence of key fashion multiples eg: Sussan, Sportsgirl/Sportscraft, Rivers, Ojay, Table Eight, Country Road.
• The relative proportions of outlets in 33 trade categories.

In all more than 2,700,000 variables were passed through the model.

Each low level type in The Retail Area Classification is allocated to one of 7 groups. These are based not only on size but also the function of each retail area. This concept is based on work carried out by W. Christaller in Germany in the 1960s and is commonly known as central place theory. Broadly speaking it attempts to establish a hierarchy of retail and administrative functions. This is today recognised in the form of Super regional, regional and sub regional centres. TRAC attempts to apply this as a simple means of grouping similar shopping centres together. Naturally within each group the lower level TRAC types express the diversity of the retail mix found within centres of the same type.

The Size bands are detailed below

The TRAC Group codes are constructed by prefixing a letter to these size band codes. The letter A, B or C indicates if the centre is in a Metropolitan, Regional or Country location. Thus A4 is a region shopping area in a metropolitan area.

The table below shows the number of shopping areas in each TRAC Group.

The next level in the TRAC Hierarchy is the TRAC Class. This indicates the relative size and importance of the centre within the Group, thereby giving a greater level of granularity.

The size bands used are given below:

The size bands were driven by the data its self clustering shopping areas with similar numbers of outlets.

Thus by adding the size indicator to the TRAC Group code, it is possible to further subdivide the shopping areas.

There are a total of 38 TRAC Classes

These provide the greatest level of detail in the TRAC classification. Each shopping area is allocated to one of 71 distinct types. The types are a further segmentation of each TRAC class based on its quality index.

The quality index compares the proportion of outlets in discretionary spend and high order retailing such as books, music, giftware, jewellery and arts. Also considered are fashion retailing in clothes, footwear and accessories and the distribution of outlets in 33 different trades. The index ranges from 1 to 4 where centres classed in 1 have the highest amount of "quality" retailing and 4 the lowest.