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.


