Guide
A practical guide to reviewing a retail trade area
A practical guide from MarketGround
Use this guide to organize the market analysis for a potential retail location. Start with the area customers could reach, then review its population, household characteristics and businesses.
Define the area and review its population
Choose a radius, travel time or custom boundary that fits the location and how customers travel. Review residents and households, then compare the daytime estimate to understand the area from both residential and workplace perspectives. At four real sites a circle and a driving area differed by up to 36 percent, and inside one ZIP area the block groups ranged from $75,367 to more than $250,000.
Compare household characteristics with the wider market
Examine income, age groups and household types in relation to your concept. Use regional benchmarks to interpret the figures. An index of 100 matches the comparison area, while a higher or lower index shows the relative difference.
Review nearby businesses and jobs
Compare relevant business categories with the resident or daytime population. Population per listed business is the measure that travels between markets. Examine nearby brands and businesses that may attract similar customers. Jobs by industry add context about the workplaces within the area.
Compare trends and overlap
Review population and employment history within consistent series. If you operate nearby locations, compare the shared population and combined geographic reach: two three-mile territories in Plano shared 23,673 residents. Keep the area definition and source references with your report, and link to the methodology for data periods and calculation details.
Using the list
Use the analysis to prepare for site review
Once the area is defined, compare its measures with your concept and existing locations. Use the findings to focus the questions you explore during a site visit and financial review.
Questions
Questions people ask
How long should a trade area analysis take?
The data part should take minutes rather than days. Drawing the area, reading the demographics, the daytime population, the jobs and the nearby businesses is a single sitting. The judgment part, which is whether the site suits your concept and your rent, is where the time belongs.
Which comparisons deserve particular attention?
Review resident and daytime population together, and examine overlap with any nearby locations you operate. These measures add useful context to the individual site estimates.
Do I need paid demographic data?
The population, demographic, employment and business measures in this guide are available from public sources. MarketGround brings those sources together for the area you select.
Can I hand this to a landlord or a lender?
You can export a PDF with your branding, location comparisons, source references and a methodology appendix. Use it to support a discussion of the market around the proposed site.
More analysis
Related research
Explore related studies and practical guides. Each article presents a geographic comparison and links to the methods behind it.
Compare daytime population, jobs and listed businesses within the same radius around four Northern Virginia employment centers.
Compare ten-minute driving areas and similarly sized circles around four locations.
Explore how household income varies within one Virginia ZIP area and compare two smaller site areas.
Apply the guide to a potential location
Start with a free account to explore a radius or custom boundary. Paid plans add travel areas, benchmarks, exports and reports with your branding.