In Successfully Locating A Business, zoning and land use expert witness John J. Wallace writes on a retailer’s biggest challenge:
A site may work within a center — but will it work within a community or region? Any retail business serves a particular “trade area.” This is the zone in which roughly 70 to 80 percent of a store’s customers live. Its boundaries are largely determined by driving time, competition, and demographics. For example, people will drive 20 minutes or more to visit a regional mall. But they expect to travel less than 10 minutes to pick up food, hardware, dry cleaning and other convenience items. If the drive is shorter to a competitor’s store, potential customers will probably go there. As for demographics, upscale stores like to locate in upscale communities, stores that target working people like to be in blue-collar areas, and so on. It’s just that simple, isn’t it?
Unfortunately, understanding a trade area is more complicated. In most centers, the anchor tenant defines the trade area for the smaller stores. Locating near a Sears outlet, for example, gives neighboring stores access to regional shoppers with a particular demographic. Being near a Macy’s offers different possibilities. A Safeway pulls in another crowd, mostly from neighborhood residents, without much regard for demographics.
What’s important to recognize is that there is no overcoming the power of the anchor tenants in defining your trade area. In fact, the managers of the anchor tenant stores can probably give you a good idea of whether a center’s space will work for your use. Try to talk to them while you are considering a space. Talk to the other merchants as well. As long as you are not in competition with them, other store operators should be very interested in helping you make the center succeed.