Around here, most gas stations are attached to repair shops, and it’s not uncommon to see two gas stations/shops very near to each other and a group of specialty shops - electrical, transmission, auto body, etc. Also, in one case I know of, the Getty on one corner and the Mobil opposite were owned by the same person- he needed more space for the repair business which provided the bulk of his revenue.
There are other reasons to buy gas at a particular station. If you have a credit card, you may have sufficient rewards points to not pay the full price. You may also have a corporate or fleet account that may have a special price negotiated. Finally, if you have a particularly finicky car, you may need one brand as opposed to another. Some brands use ethanol, while others don’t, and some cars don’t do well with that. So you pay a little more for pure gas.
If Ikea’s already gotten several warning & fines can’t the city just sent a crew out to remove the sigh and then bill Ikea for it?
Intersections not only have potential customers for gas stations from two different directions but some drivers may make a point of hitting that intersection as part of their route planning.
Pubs that cater for people having a night out (As opposed to having a quiet weekday pint) cluster together because many people like to move from pub to pub over the course of the night.
A good many of them will want to eat at the end of the night and so you get clusters of fast food places (Also around other entertainment venues such as cinemas, sports grounds etc.) and likewise nightclubs.
Theatres often attract resteraunts in groups for post performance meals.
I think that with certain kinds of shops like antique shops or jewelry shops their customers haven’t set their minds on a definite article but are looking for something that they fancy, so that if they don’t see something they like in the first shop they can browse around the other shops.
Criminal lawyers group themselves around law courts for obvious reasons.
All my examples are Brit based and so may not apply to the U.S.
It’s all based on the three rules:
- Location
- Location
- Location
I’ve seen examples of all of what you mentioned even in smaller American cities. Your mention of lawyers reminded of bail bondsmen, which often cluster together near a jail. Delaware Street in Denver is one example of a bail bond row.
This was a fascinating video… it might help clarify things in a more scientific manner.
The reasons you gave are all valid… but this explains the phenomena.
~A
And where to the zombie supply stores cluster?
To add to the thread, I was just visiting a city with three stores specializing in blenders. All three were located in the same block of the same street. That is a high degree of specialization.
That was very interesting! It makes a lot of sense.
I’ve noticed a lot of car dealers clustering on a certain main street in my city. I always wondered why, and that video explains, in a simplified fashion, why.
Now, liquor stores, in my city, are pretty evenly spread out, and not clustered. I have a certain store I favor, and the little alcohol I buy, I usually go out of my way to go there. But if I didn’t care I wouldn’t worry, as I’d never have to go out of my way to find alcohol.
And then in some places, when they realize they can sustain more than one location, they build the same store on the other side of the street. Hence the two Tim Hortons on one block in Saskatoon. No matter which direction you go, you can get your Timmies
They travel in herds for optimizing feeding fitness and for mating purposes. When a large clique of stores finds a viable ecosystem they will undergo a groupmemesis breeding state in which they will, overnight, spawn a brand new Walmart in what was the the day before an ailing striipmall or virgin landscape. The full taxonomy and dynamics of these magnificent lumbering beasts is still being explored by intrepid econoethnographers.
I would suggest a simpler, if dumber (albeit corporate-smart !) solution to the mystery :
Boss : “Hey, there’s already a carpet store in this town. Here.”
Marketing Consultant : “They must have done market research to pick their location. Why don’t we save the expense and just build our store there too ?”
Boss : “GENIUS !”
5 or 6 iterations later…
When I was growing up in the 40s and 50s, there were five dept. stores in Philly, three of them sharing one corner (8th and Market). The fourth was really upscale (if you have heard of the Wanamaker organ, reputedly the largest in the world, that’s where it was) and obviously content to be on its own. The fifth was neither distinguished by its level nor in a conglomeration. When dept. stores started losing out to malls, that fifth was the first to go. Now only one of them remains at 8th and Market and Wanamaker’s turned into concessions.
But at their height, it was clear that, in addition to competing with each other, 8th and Market became the place you go to if you wanted to shop in a dept. store and the concentration helped them all.
Jane Jacobs has something somewhere about how many classes of business cluster not only to create the neighborhood where you go for the product, but also because many of the same suppliers who cluster with them and it is easier if you are located near your suppliers.
People are pretty fickle when it comes to brand loyalty. One major corporation is generally just as so-so as another. Thus, while someone may have a slight preference for CVS, if another pharmacy opens closer to their house, well, who at CVS will be offended if they switch? Thus CVS will open nearby to keep its current customers (and hopefully attract a few more diverted from elsewhere).
For a locally owned business, people might make more of an effort to patronize it, however they risk being price out by the larger chains that offer similar goods and services cheaper.
This one’s a keeper.
I think the existential poet and humorist, Lewis Black, said it best:
Sometimes it is to prevent a competitor from gaining a significant advantage. Because if a competitor does they have additional resources to compete.
If Home Depot ‘owns’ (or pwns) a area, opening a Lowes there would end that, to Home Depot’s disadvantage.
And it is more to the one’s disadvantage then to the other’s advantage.
Actually, I read an article once that explained why there are so many Starbucks, and in particular why it’s common to see them right across the street from each other in major cities.
The thing is that, more than for many businesses, location is critical for coffee shops. People on their way to work in the morning will stop at a coffee shop that’s right on their way to the office. They won’t go out of their way even a little bit, not even to cross the street. So if the pedestrian traffic is big enough, two Starbucks on the two sides will have two independent customer streams.
Well, this explains why more than half of the electronics parts suppliers in Mississauga are located in the same strip plaza on Matheson Blvd just west of Dixie. Every hardware geek in the western half of the Greater Toronto Area knows where to go for parts…
To expand on what’s been said earlier, when it comes to things like fast food and coffee most consumers tend to have a preference for a particular brand if “all else is equal”, but will settle for an alternative brand if it is more convenient to do so. For example, I prefer Starbucks coffee to Dunkin Donuts, but not so much that I’m not willing to deviate from my morning commute during rush hour to get some. My family and I prefer Papa John’s pizza, but if my wife and I decide to have have pizza for dinner neither of us would want to take a detour from our evening commutes to pick one up when we both drive right by Pizza Hut. In many cases it is essential for businesses to open franchises in high traffic areas not just in spite of, but because, their competitors already have a presence there.