Care to take a shot at this one about business locations?

Question

It's easier, I think, to give examples of what I want your opinion on:

I live in a SC Indiana town of 35k or so. Our SECOND Super Wally-World is opening up, along with a Sam's Club. There are now approx. 6 Supercenters within a 30 minute drive from me.

Our first Starbucks (within a Super Target) just opened up 1-2 years ago. A second (within a strip center) opened up one year ago just FIVE minutes from the first one.

My drugstore, CVS, just opened up a new location across the street from its old location. The old one (in a strip center) had great parking and decent access from two different directions. The new one is on what was already one of my town's most dangerous intersections, making access to it more difficult. In addition, it has a newer Walgreen's just 100 yds from it. Also, Blockbuster had to build a new location just one lot down from its previous one to make room for CVS.

All of these things, to me, are incredibly stupid.
As I'm out of space, your thoughts?

I understand marketing, but still find it stupid! LOL

Answer 1

It seems to me that this is a relatively affluent area. Businesses want to be where the money is, like vultures to the carcass. I live in Los Angeles and as one boogies around the outskirts of town one will notice super-centers are popping up in the middle of nowhere. Not to worry. Brand new subdivisions of homes will sprout up around them in no time. The tactic is that when the homes become occupied, all their shopping needs are close at hand. As a matter of fact, these vendors that are close at hand are the only vendors within a reasonable distance of home. Ready-made communities. Aggressive expansion. Take a worthless piece of land, put something on it, and it's not worthless any more.

On the other hand, some things seem to defy logic. Or some things are seemingly spiteful. Starbucks built one of their stores within less than a block of a privately owned small coffee shop. The owner of the small coffee shop thought his business was dead meat. But, shortly after Starbucks opened it's doors, business for the small coffee shop more than doubled. Put that in your pipe and smoke it. The small business fairy works in mysterious ways.

As far as location is concerned. Location is THE MOST important factor when setting up shop. Any business worth its salt will do extensive research on this matter before making any decisions. Some, it seems, throw darts at a map and hope that nobody is there already.

Answer 2

When large retail corporation open up new locations, a lot of research goes into the choice in location. I know it may seem odd to have a starbucks 5 minutes from another one, but what you have to take into consideration is the population within the drive circle of that 5 minute radius. A company, like starbucks, has to take into consideration how many people it can successfully serve, without over crowding or long wait times, and also take into consideration how far a consumer would actually travel for a cup of coffee, which is not that far. Hense, although they seem awfuly close to each other, it makes sense for profits.

Regarding the CVS, more than likely the old location was leased, and the new one owned. Location might not be the most conveinient, but it is cost effective. And as far as a walgreens being by it - very typical, look at grocery stores or home improvement stores, you will always see two competitors within blocks of each other. They rely on that competition for business.

On the super centers, again, same idea as starbucks. If you drive 30 minutes, you are passing a lot of residential homes - stores are placed based on population density and ease of use & conveinience.

If you take a map, pinpoint the retail stores you are talking about and draw what would be the equivalent to driving 5 or 10 minutes away in all directions as a circle around the store, you will find that there is only a small portion of each SAME store overlapping, if at all. (ie - mapping starbucks stores)

It is actually a very complex science.

Answer 3

Our trends seem to be not only bigger and better but newer and in your face without regard many times to good sense. I don't think you're off base. I wouldn't use any store that had limited access from a dangerous intersection. Starbucks is usually pretty on top of things though. Could the second one be in response to people who don't want to use Target?

Answer 4

Its called marketing.
They must make themselves look newer bigger and better looking. It all comes down from corporate headquarters.
I know its crazy, and not the best of things for a small town. But they are hoping the town will increase in size over the next ten years.

Answer 5

I used to drive past two starbucks during my 3 mile commute to work - at starbucks! It's unbelievable that they can keep that many stores in business, but they do!

People are lazy. They won't go a few blocks/miles out of their way.