Quote:
Originally Posted by fusili
Quick answer? I would say 5000 people per square km.
For reference, Barcelona is 16K/km2, Paris is ~20K/km2 (Parisian suburbs are actually really dense, and perhaps denser than the core) and Calgary is around 1.2K/km2 on average.
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This is interesting. There are a bijillion factors, perhaps the most important of which are the type of retail, disposable income of potential customers, and consumer habits. For example, the past decade has seen an explosion of spending on food/entertainment all over North America, and this is due in part to later family planning, longer work hours, increased female salaries, and marketing/cultural norms. If you tried selling lattes for $5 in 1995, you wouldn't get a single customer.
While we are talking about coffee shops, an average Tim Hortons franchise costs about half a million in start-up, pulls in about $1.5 mill/yr, and the franchisee makes about $250 000/yr after everybody and the wholesaler and the landlord and corporate get paid, recovering her/his investment in just 2 years if everything goes as planned (not including paying themself). Other business types will obviously vary A LOT, but if 0.5 M is typical for start up, it sounds like 1.5 M in sales annual can keep a small business thriving.
If you are only drawing customers from walking distance, let's say within 1 km radius to keep my math simple, then you must pull 1.5 M dollars from 3.14 km^2. That's about $478 000/km^2. (Had the walking radius been 0.5 km, we'd need $1 900 000/km^2!!!). If you have a population density of 5000souls/km2, and you are only selling to them, on average each person must spend $95/yr on your business, or about $1.83/week.
If you reverse this hypothetical scenario, spending $1.83 a week at a business that 5000 people use should keep it thriving. Spending $18.30 a week at a business 500 people use will do the same, or $183/week at a store 50 people use. Of course, like I said, it depends on a ton of factors. The good part about shopping in your own neighbourhood is that about %50 of what you spend goes home with the staff, who might then spend their earnings in the same neighbourhood, etc, etc.
Continuing the scenario, if 5000 people in a 5000 soul/km2 neighbourhood spend an average of $100/week disposable income in their neighbourhoods, it ought to be enough to keep 54 Tim Hortons-sized businesses running within 1km of their home, or 17 businesses /km. (if every man, woman, baby, senior citizen, and child in a 5000 person/km2 neighbourhood spends only $10/per week within a km of their house, only 1.7 businesses/km2 can survive).
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