Businesses that tend to locate near each other

[oscar]

There's an economic theory on why a lot of this happens, which I first heard of in an intermediate microeconomics course in college.  Look up "Hotelling's Law" or "Hotelling location theory" (named for Harold Hotelling, not specific to hotels though it can apply to them as well). 

In a simple case of a town with only one main street, and customers are evenly distributed along the street, if there are only two competitors and location is the most important thing to customers, the competitors will tend to locate right next to each other, at the street's midpoint so that each has the inside track for half the market.  If one of them locates at one end of the street, the other can take away most of its market share by setting up shop at the midpoint, whereupon the first guy will move also to the midpoint as soon as he can to erase his competitive disadvantage. 

It gets much more complicated with more competitors, or more major streets, or customers who care more about things other than location.  And sometimes not following the herd can be the best strategy, even theoretically.  But the basic pressure to make your business locationally as much like your competitors as possible remains.  I'm sure all the big retail chains have figured this all out.

[jeffandnicole]

A lot of it also has to do with zoning.  For the most part it makes sense to be around other businesses, because people are traveling in that general direction anyway.  And businesses near residential areas tend to draw the ire of nearby residents because of lighting, trash, noise, etc. 

Like-business types (drug stores, big-box home improvement stores, etc) tend to feed off each other.  I don't know the absolute specifics behind it, but studies and research have consistently shown businesses do better when they are near their competitors.

Sure, there are some businesses that are by themselves, without any other businesses around.  And it's convenient if you happen to live near that business and are in need of that businesses' items.  But in general, they don't tend to bring in as much revenue as businesses in more-established business districts.

[1995hoo]

Since "jeffandnicole" mentioned zoning, how does this sort of thing work out in Houston, since they don't have zoning there? If I've ever been to Houston it was when I was less than one year old and thus I wouldn't remember it. I've heard some stories from people who have lived there about arrangements that'd never be allowed in Virginia–one couple said their church backed up to a titty bar and they shared a dumpster, for example.

[US71]

I'm also starting to see Dollar General and Family Dollar stores being by each other, too.

Spiro, OK just had a Dollar General open about a block from Family Dollar. FD quickly imploded and closed.

[hbelkins]

Surprising, since in most areas I've seen, the two coexist quite well.

In a lot of small towns and rural communities, the dollar stores are the closest things to department stores you can find. Prices are a little higher than Walmart, store brands are not quite as good as the Walmart store brands, and the selection of products is not as varied as Walmart, but sometimes it's easier to run into a Family Dollar or Dollar General than it is to fight the crowd at Walmart.

[US71]

Surprising, since in most areas I've seen, the two coexist quite well.

In a lot of small towns and rural communities, the dollar stores are the closest things to department stores you can find. Prices are a little higher than Walmart, store brands are not quite as good as the Walmart store brands, and the selection of products is not as varied as Walmart, but sometimes it's easier to run into a Family Dollar or Dollar General than it is to fight the crowd at Walmart.

DG opened a new store here about a year and closed their old one. The FD up the street is still there, but looks "tired'

[bassoon1986]

My one red light hometown got a Dollar General in about 2001 which was a big thing and Family Dollar popped up a few blocks away about 3 years later. You would think for a town of about 2000 people there isn't enough business for both but they co-exist pretty well.

Shreveport definitely tends to have all three drugstores near each other (Walgreens, CVS, and Rite Aid). Pines Rd at West 70th St. has them at 3 out of the 4 corners. There are also many strip malls I can think of that have some combination of the following: Best Buy, Lifeway Christian Bookstore, PetCo or PetSmart, TJMaxx or Marshall's, and maybe Michael's.

[US71]

I was in Stuttgart, AR over the weekend. All the motels were within 2-3 blocks from each other. The "el roachos" were at one end of the "strip", the overpriced franchises at the other end. But nothing to eat after dark unless you drove across town to McDonald's or Dodge's Store.

[vtk]

Old guy mode on.

Kroger used to own a drug store chain called SupeRX.  Always next to a Kroger, and Kroger did not have a pharmacy inside nor did is sell the types of items that drug stores do.  Sold them off.  And then just put a pharmacy in the store.  Whoever bought SupeRX didn't have a good lawyer, or they would have got a non-compete. 

Is that when Kroger Sav-On became Kroger Food & Drug?

[BamaZeus]

Tuscaloosa county must be heaven for Dollar General.  We have two stores literally within eyesight of each other, and 2 others within a 2 mile radius.  I was bored one day at work and counted up how many there were in the phonebook, and there were something like 20 or 22 listed for a population of under 200,000 people. I'm all for variety as far as grocery stores go, but how many Dollar Generals does one area really need?

[triplemultiplex]

There always seems to be a Qdoba right near a Noodles & Company.  Like in the same strip mall building that's between the big box store/mall and the arterial street.

Sometimes the Qdoba is a Chipotle, but those are effectively the same restaurant.  (Seriously, all their food is identical.)  So a Chipotle near a Noodles & Co counts.

If you have those two chains around, then it will not be far to the nearest Jimmy Johns.  Once you have all three, then the odds of finding a college campus in the neighborhood just went up exponentially.  Gee, I wonder why?

[rawmustard]

In smaller cities (particularly if there's one freeway interchange), a "restaurant row" will tend to develop, sating consumer expectation. In larger cities which have developed over time, the fast food joints could definitely be scattered. I've noticed that some Wendy's locations have been closer to residential areas than other chains in the market segment. (It was definitely the closest primarily burger chain [since I count DQ as primarily soft serve] one to where I grew up in Kalamazoo's Milwood neighborhood, although that particular location closed a couple years ago and is now the site of local breakfast chain East Egg.)

At least as far as pharmacies go, I'm wondering if one will eventually occupy the old Walgreens location in the Verona neighborhood in Battle Creek, since Walgreens built a brand new store across the street. Rite Aid seems to not be in the mood to have as many locations as Walgreens, and I don't think CVS has ever tried Battle Creek. The "dollar" chains seem to be a dime a dozen, as they exist close to residential areas (one of those could easily occupy the old Walgreens space.).

[6a]

Since "jeffandnicole" mentioned zoning, how does this sort of thing work out in Houston, since they don't have zoning there?

Wait, what? Houston doesn't have zoning? I seriously never knew that.

Anyway, I used to work for a company that ran stores under the name The Shoe Dept.  They locate a huge number of stores (around 1100 when I left) near Walmarts. They are notoriously cheap and avoid advertising so being in high traffic centers is a plus.

[DaBigE]

Since "jeffandnicole" mentioned zoning, how does this sort of thing work out in Houston, since they don't have zoning there?

Wait, what? Houston doesn't have zoning? I seriously never knew that.

IIRC, the series How The States Got Their Shapes had at least part of an episode devoted to Houston's lack of zoning.

[lepidopteran]

Some used-to-be's:

Radio Shack and Tandy Leather

Outback Steakhouse and Carrabba's Italian Grill

In Ohio:  SOHIO and Dutch Pantry

How about Sears and JCPenney?  If you found one anchoring a mall, you'd often find the other there as well.  And I guess you could say the same about any number of stores, past and present, that locate primarily if not exclusively in malls, e.g., Foot Locker, Kay-Bee Toys, etc.

Regarding Kroger and SuperX, you'd often find a drug store near a supermarket, back in the days before pharmacies inside supermarkets became the rule rather than the exception.  (This is why if a supermarket has a pharmacy, a sign on the outside would say so, or add the words "Food and Drug" in the case of Kroger, or pair the store name with that of a drug store, e.g. "Kroger Sav-on", "Jewel-Osco", etc.)  You were also likely to find a liquor store next to a grocery -- and still do in states where supermarkets cannot sell alcoholic beverages.

Then there's the collection of core businesses that locate together in the "neighborhood shopping center" in planned communities:
Supermarket
Drug Store (if not combined)
Liquor Store (again, if not combined)
Pizza Place
Bagel Place
Chinese Restaurant
Dry Cleaner
Bank
Sports Bar/Nightclub/Lounge

[adventurernumber1]

Outback Steakhouse and Carrabba's Italian Grill

On Arkwright Rd. off of I-75 in Macon, GA there is an Outback & a Carrabba's right next to eachother on the north side of the exit.

Also, agreeing with other posts on this thread, I see Walgreen's, CVS, Rite Aid Pharmacy, any combination of two of those three chains is very common at some intersections, at least around here.

[cjk374]

Anyway, I used to work for a company that ran stores under the name The Shoe Dept.  They locate a huge number of stores (around 1100 when I left) near Walmarts. They are notoriously cheap and avoid advertising so being in high traffic centers is a plus.

Strip malls seem to be popping up next to alot of Wal-Marts in my area.  They seem to all have the same stores:

Shoe Show (Shoe Dept.'s arch nemesis)
Game Stop
Dollar Tree
Anytime Fitness
at least one or two eateries...the one next to the Ruston Wal-Mart has Cheeburger-Cheeburger and Ronin Hibachi Grill

[US71]

Red Lobster and Olive Garden

[6a]

Anyway, I used to work for a company that ran stores under the name The Shoe Dept.  They locate a huge number of stores (around 1100 when I left) near Walmarts. They are notoriously cheap and avoid advertising so being in high traffic centers is a plus.

Strip malls seem to be popping up next to alot of Wal-Marts in my area.  They seem to all have the same stores:

Shoe Show (Shoe Dept.'s arch nemesis)

I'll let you in on an insider secret: those are the same company In practice the two have nothing to do with each other but the corporate name is actually Shoe Show Inc.

I know of a handful of places that have both inside the same mall/center. The Dept is just an upscale version.


iPhone

[formulanone]

Red Lobster and Olive Garden

They both used to be part of Dardens Restaurant concepts...Possibly a Longhorn Steakhouse and/or Bahamas Breeze nearby, as well.

[jeffandnicole]

Same with http://www.bloominbrands.com/home/index.aspx - Outback, Carrabba's, Bonefish Grill, etc.  After Chi-Chi's went under (RIP), many of their restaurants were purchased by the Outback corporation, and were divided into two restaurants.  In a case near me, it became Outback & Bonefish (and the Outback is even open for lunch during weekdays; a relative rarity within that chain). 

In Delaware near I-95's Exit 4, a Chi-Chis became a Cheeseburger in Paradise & the remainder was leased for a Dunkin Donuts.  Cheeseburger is no longer part of Outback's portfolio...and this particular location has since shut down completely.

[lepidopteran]

Barber Shops and Beauty Salons

These two, located near each other or even adjacent, are not as common as they used to be. It was once very simple: men go to the barber, women to the beauty parlor.  But nowadays, the term "Beauty Salon" has given way to the more mundane "Hair Salon", as they're more likely to be unisex.  Or even a fancy-sounding "Day Spa" if they offer other services like manicures and facials.  Yet barber shops are still around, complete with the rotating red-white-and-blue pole out front.  Barbers are actually my preference, per that old joke:

Q: What's the difference between a barber and a hairstylist?
A: About 20 bucks.

[Zeffy]

Q: What's the difference between a barber and a hairstylist?
A: About 20 bucks.

I disagree with that statement - whenever I actually want a haircut, I go to a salon, and I pay equivalent to a barbershop, plus I don't risk getting that buzzcut I managed to get in 8th grade when I asked for an inch off and not "leave me with an inch". God damn I think that's when I stopped going to barbers. (That, and I grew my hair out much longer than before after that fiasco) My average haircut costs roughly $20, and that's with a tip. At least in the 'Boro, there's no difference in cost between a barber and a salon.

Then there's the collection of core businesses that locate together in the "neighborhood shopping center" in planned communities:
Supermarket
Drug Store (if not combined)
Liquor Store (again, if not combined)
Pizza Place
Bagel Place
Chinese Restaurant
Dry Cleaner
Bank
Sports Bar/Nightclub/Lounge

With the exception of a lounge / bar, the shopping center(s) in Hillsborough has at least one of each item on that list.

[Brandon]

Q: What's the difference between a barber and a hairstylist?
A: About 20 bucks.

I disagree with that statement - whenever I actually want a haircut, I go to a salon, and I pay equivalent to a barbershop, plus I don't risk getting that buzzcut I managed to get in 8th grade when I asked for an inch off and not "leave me with an inch". God damn I think that's when I stopped going to barbers. (That, and I grew my hair out much longer than before after that fiasco) My average haircut costs roughly $20, and that's with a tip. At least in the 'Boro, there's no difference in cost between a barber and a salon.

Wow, that's pricey!  When I was in college, there was a place in Houghton, MI doing hair cuts (decent ones too) for $6.  Now, I usually spend $13 with the tip.

[adventurernumber1]

Whenever I get a haircut (which currently is rarely, lol. I've had long hair since 4th grade.) it's about 10 bucks. I go to a barber but he does a good job.