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The problem seems so obvious. There is far more supply than demand. Why do people keep opening these stores when it is clear no one wants them?
by baroffoos 7y ago
The problem seems so obvious. There is far more supply than demand. Why do people keep opening these stores when it is clear no one wants them?
- patio11 7y agoIt’s not clear no one wants them, since there is little data available to an ex-salaryman looking to open one in a particular neighborhood and if you do an unsophisticated “just watch a store all day” competitive analysis both a thriving store and a struggling store appear busy at all hours of day and night. The franchisor is basically uniformly in favor of more locations since the franchisee bears most startup costs and the franchisor gets an effective call option on their cash flow. (It’s also not clear to me that convenience stores are oversupplied relative to demand; there are probably some geographic mismatches but in e.g. this neighborhood in Tokyo you can find 3 in a Us city block and they’re self-evidently very viable. Which you might ask “How is that self-evident?” and I’m left to say “Trust me.”)
- michaelt 7y agoI guess it depends on how much data you'd expect someone to gather before opening a store. I was under the impression opening a convenience store cost $50,000 or more, not an investment to make lightly IMHO. A few visits will tell you if the owner is working 16 hours a day 7 days a week, and you can estimate markups by looking at prices on the store shelves. And that's without looking for franchisees complaining online, or asking them in person.
- psychomugs 7y agoThere might be more supply than demand, but that doesn't mean that the demand is low.