How do grocery stores find the right location for expansion?

Dive Brief:

  • The Durham Planning Commission voted 11-2 against the rezoning request for a new retail center in Durham, N.C., where Publix is looking to open a new store, according to Triangle Business Journal.
  • The property is currently zoned for suburban residential. Halvorsen Development Corp. is looking to use the area for both commercial and residential development, consisting of 70 single-family housing lots and a 66,080-square-foot retail center.
  • Currently, there are four other grocery stores within a two-mile radius of where the new Publix wishes to open.

Dive Insight:

Finding the right location for a new store is a process that takes careful consideration. Population, neighborhood demographics, visibility, the amount of traffic that goes by and local competition are all factors taken into consideration when grocery chains look for a new store location.

Just because other stores are in the area doesn’t mean it’s not the right location. Odds are, these other stores have done similar homework and already found that the factors that make for an ideal spot are there.

If a grocery chain thinks the stores in the area are old or don’t offer the same value, there’s nothing wrong with opening close by — sometimes even across the street to steal away customers.

Some companies, like Kroger, have adopted technology to help them with site selection, while others go with old-fashioned census numbers and analytics.

Problems arise when a store opens in a new location and doesn't get customers because other nearby stores offer products they don't, such as ethnic grocery markets. Retailers should be sure to do their homework on what the competition centers on and what local populations want from their grocery experience before adding a new location.

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Filed Under: Grocery
Top image credit: Flickr user hyku