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Anecdotally the position of pharmacy chains is so weird. I feel like more than half the time if I see one of either Rite Aid, Walgreens, or CVS there's one of t

by rtkwe 3y ago

Anecdotally the position of pharmacy chains is so weird. I feel like more than half the time if I see one of either Rite Aid, Walgreens, or CVS there's one of the other two directly across the street. Usually it's the pair of Walgreens and CVS. Someone with skills in GIS could probably answer this pretty quickly...

flashback2199 3y ago
It's probably that math phenomenon that explains why gas stations cluster together. I guess this is the one. I heard about it on here long time ago. https://mindyourdecisions.com/blog/2008/03/25/game-theory-tuesdays-hotelling%e2%80%99s-game-or-why-gas-stations-have-competitors-nearby/ https://mindyourdecisions.com/blog/2008/03/25/game-theory-tu...
- pests 3y ago
  There's an old joke about how McDonald's would spend millions of dollars on selecting the locations for their franchises. Traffic analysis, weather forecasts, foot traffic, local politics, chances of disaster, advanced models and simulations projecting population density and future profits. Wendy's just put their stores next to a McDonald's.
  - dreamcompiler 3y ago
    By the same token, Tesla spends a lot of time figuring out where to put superchargers. Electrify America just builds their superchargers across the street from Tesla's (or in the parking lot of the nearest Walmart).
- deathanatos 3y ago
  … I always figured that gas stations clustered together to minimize the distance long haul drivers would need to go to get to a gas station. I.e., they're clustered, but near highways. The same logic doesn't apply to pharmacies: I don't have a sudden need for drugs on the road. (I'm not sure how much I actually buy the mathematics in the article.)
  - flashback2199 3y ago
    The nice thing about math is that you don't have to buy it, it's free.
- rtkwe 3y ago
  There's also the fact that there are certain spots that are better for a particular store than others so multiple stores will naturally cluster around those nodes. Major intersections that bring people in from surrounding areas easily and quickly and stuff like that.
a2dam 3y ago
This is how most things are. Look around next time you see a fast food restaurant. If you have some territory, there's usually an optimal place in that territory to put your pharmacy / fast food restaurant / whatever, and not putting it there means that you'll be losing customers to people who do.
lutrinus 3y ago
Have a look at Hotelling’s law: https://en.m.wikipedia.org/wiki/Hotelling%27s_law https://en.m.wikipedia.org/wiki/Hotelling%27s_law
TylerE 3y ago
This is an actual thing chains do. My understanding is that much like Coke/Pepsi it’s often about maintaining competitive parity. What they’re afraid of is not doing that, and then the area goes through a growth spurt and suddenly you’ve got a town that your competitor owns. This even applies when the stores are minimally profitable, because if you don’t bother, then the competitor that does actually makes a profit because they have no competition. It’s almost a form of retail Mutually Assured Destruction.
- xtiansimon 3y ago
  Or something else. My town has 7 “pizza” places, 4 Chinese, and so on. All privately owned. An Indian owner opened a hamburger concept when we already have two excellent options. They didn’t last. We don’t have an Indian (vegetarian) restaurant. I thinking my restaurant entrepreneur community would rather compete t against other successful businesses. Like a sports team.
dhx 3y ago
Add as vector layers into QGIS: CVS: https://data.alltheplaces.xyz/runs/2023-10-14-13-31-57/output/cvs_us.geojson https://data.alltheplaces.xyz/runs/2023-10-14-13-31-57/outpu... Walgreens: https://data.alltheplaces.xyz/runs/2023-10-14-13-31-57/output/walgreens.geojson https://data.alltheplaces.xyz/runs/2023-10-14-13-31-57/outpu... Rite Aid: https://data.alltheplaces.xyz/runs/2023-10-14-13-31-57/output/rite_aid_us.geojson https://data.alltheplaces.xyz/runs/2023-10-14-13-31-57/outpu... Then you can conduct all sorts of analysis such as k-nearest-neighbour distance analysis between brands, etc. Sample output of the three brands (green for Walgreens, yellow for CVS and red for Rite Aid): https://github.com/davidhicks/atp_samples/blob/main/us_pharmacies.png https://github.com/davidhicks/atp_samples/blob/main/us_pharm...

by rtkwe 3y ago

flashback2199 3y ago

It's probably that math phenomenon that explains why gas stations cluster together. I guess this is the one. I heard about it on here long time ago. https://mindyourdecisions.com/blog/2008/03/25/game-theory-tuesdays-hotelling%e2%80%99s-game-or-why-gas-stations-have-competitors-nearby/ https://mindyourdecisions.com/blog/2008/03/25/game-theory-tu...

pests 3y ago
There's an old joke about how McDonald's would spend millions of dollars on selecting the locations for their franchises. Traffic analysis, weather forecasts, foot traffic, local politics, chances of disaster, advanced models and simulations projecting population density and future profits. Wendy's just put their stores next to a McDonald's.
- dreamcompiler 3y ago
  By the same token, Tesla spends a lot of time figuring out where to put superchargers. Electrify America just builds their superchargers across the street from Tesla's (or in the parking lot of the nearest Walmart).
deathanatos 3y ago
… I always figured that gas stations clustered together to minimize the distance long haul drivers would need to go to get to a gas station. I.e., they're clustered, but near highways. The same logic doesn't apply to pharmacies: I don't have a sudden need for drugs on the road. (I'm not sure how much I actually buy the mathematics in the article.)
- flashback2199 3y ago
  The nice thing about math is that you don't have to buy it, it's free.
rtkwe 3y ago
There's also the fact that there are certain spots that are better for a particular store than others so multiple stores will naturally cluster around those nodes. Major intersections that bring people in from surrounding areas easily and quickly and stuff like that.

a2dam 3y ago

This is how most things are. Look around next time you see a fast food restaurant. If you have some territory, there's usually an optimal place in that territory to put your pharmacy / fast food restaurant / whatever, and not putting it there means that you'll be losing customers to people who do.

lutrinus 3y ago

Have a look at Hotelling’s law: https://en.m.wikipedia.org/wiki/Hotelling%27s_law https://en.m.wikipedia.org/wiki/Hotelling%27s_law

TylerE 3y ago

This is an actual thing chains do. My understanding is that much like Coke/Pepsi it’s often about maintaining competitive parity. What they’re afraid of is not doing that, and then the area goes through a growth spurt and suddenly you’ve got a town that your competitor owns. This even applies when the stores are minimally profitable, because if you don’t bother, then the competitor that does actually makes a profit because they have no competition. It’s almost a form of retail Mutually Assured Destruction.

xtiansimon 3y ago
Or something else. My town has 7 “pizza” places, 4 Chinese, and so on. All privately owned. An Indian owner opened a hamburger concept when we already have two excellent options. They didn’t last. We don’t have an Indian (vegetarian) restaurant. I thinking my restaurant entrepreneur community would rather compete t against other successful businesses. Like a sports team.

dhx 3y ago

Add as vector layers into QGIS: CVS: https://data.alltheplaces.xyz/runs/2023-10-14-13-31-57/output/cvs_us.geojson https://data.alltheplaces.xyz/runs/2023-10-14-13-31-57/outpu... Walgreens: https://data.alltheplaces.xyz/runs/2023-10-14-13-31-57/output/walgreens.geojson https://data.alltheplaces.xyz/runs/2023-10-14-13-31-57/outpu... Rite Aid: https://data.alltheplaces.xyz/runs/2023-10-14-13-31-57/output/rite_aid_us.geojson https://data.alltheplaces.xyz/runs/2023-10-14-13-31-57/outpu... Then you can conduct all sorts of analysis such as k-nearest-neighbour distance analysis between brands, etc. Sample output of the three brands (green for Walgreens, yellow for CVS and red for Rite Aid): https://github.com/davidhicks/atp_samples/blob/main/us_pharmacies.png https://github.com/davidhicks/atp_samples/blob/main/us_pharm...