Why do shops open next to each other? Here’s the theory in a nutshell: businesses want to locate themselves near the center of their potential customer population to attract the greatest amount of customers.
What is primary trading area? Primary – The primary retail trade area is the geographic region that produces 50 to 80 percent of a store’s sales. This is the most important trade area for most retailers because it is the draw area for their most frequent customers.
Why is proximity to competitors important? It may be hard to believe but the proximity of competitors may actually help you attract more clients. This is because a higher concentration of similar businesses makes the clients/customers start to associate that area with a particular service/product(s).
Why do businesses compete with each other? Competition stimulates firms to lower their own costs and run their businesses as efficiently as possible. But when competition is restricted – such as by one company acquiring most competitors or reaching agreements on prices with other competitors – prices are likely to increase and quality is likely to also suffer.