There’s a reason most people are familiar with the saying, ‘location, location, location.’ It can truly make or break the success of a new business.
For this reason, when opening a liquor store, choosing the right location is one of the most important business decisions you’ll make.
Questions you have to ask yourself include…
- Are there enough potential buyers in the area?
- Who will be my main competitors?
- What will foot traffic look like?
- What is the cost of rent?
The mistake some business owners will make is answering these questions based on assumptions, and not data.
In order to feel confident in choosing the right location for your liquor store, our market research company recommends conducting a market analysis. Here’s why (and how).
Challenges of Choosing the Best Retail Location
There are several factors that go into choosing the right location for a liquor store. Potential income, local competitors, walk-in traffic, market opportunity – the list goes on and on.
While gut feelings can pan out to be right, they don't make strong enough cases for making critical business decisions such as store location. On the contrary, market research can help new businesses by identifying the current state of the area and industry you are trying to break into.
A market analysis with a third party will reveal detailed information about buyer demographics, expectations, communication preferences, and much more. It will also identify how competitors are performing in the designated market area.
With this data, you can be more informed in your choice of liquor store location.
The final report is also a great deliverable for banks and investors to feel confident in granting funding for this new business venture.
Solution: Choose a Liquor Store Location with Data
While there is no such thing as a magic crystal ball, the use of market research when opening a liquor store is the closest thing to predicting its potential success.
Take for example a recent market analysis conducted by Drive Research on behalf of a business owner looking to open a liquor store. The new development project was in a small town in Oneida County, NY.
Our client was looking for guidance for the concept strategy. They wanted relevant data to assist with the decision of choosing a location in order to minimize risk and maximize return on investment (ROI).
To address the objectives at hand, Drive Research recommended a market analysis. The approach leveraged secondary research to provide a comprehensive market overview.
The components of a liquor store market analysis include:
- Market analysis and demographic trends of the primary market area (PMA)
- Market opportunity analysis within the alcoholic beverages segment, and breakdown of 8 similar businesses in the primary market area
The PMA was defined as the ZIP code of the potential liquor store location. The secondary market area was defined as a 10-mile radius around the intended store address.
1. Opening a Liquor Store Based on the Primary Market
The primary market area analysis is considered to be the primary market area from which the proposed liquor store location will draw the majority of buyers.
Based on our research, it was expected that a large majority of the customers of the proposed property would be drawn from this geography.
This report component detailed key demographic information of potential customers of the proposed liquor store, such as:
- Gender. The report shows the percentage of males and females currently living in the primary market area. It also shows projections for 2026 and the percent change.
- Age. The report shows the percentage of specific age groups currently living in the primary market area. It also shows projections for 2026 and the percent change.
- Household income and size. The report shows the percentage of HHI ranges and size of household (ie. one person, two people, three people, etc.) for those living in the primary market area.
- Housing and vehicles. The report shows total housing units and types of occupancies such as owners, renters, and vacancies. Our market analysis company also includes the number of vehicles per household.
- Race and ethnicity. The report identifies how racially diverse the primary market area is and what that breakdown is based on different races and ethnicities.
- Marital status. Shows what percentage of the PMA is married, single, divorced, widowed and never been married.
- Education. Shows what percentage of the PMA has achieved their high school diploma, some college, bachelor’s degree, and master’s degree.
- Workforce. Statistics identify what percentage of the population is in the labor force, not in the labor force, blue collar workers, and white collar workers.
- Occupation types. Details number of employees, business establishments, and business types (fishing, mining, construction, manufacturing, etc.).
2. Open a Liquor Store Based on Size of Opportunity
In addition to the primary market analysis, Drive Research also detailed information that shared the size of the opportunity within a 10-mile radius of the proposed liquor store location.
This section of the report focused on the market potential within the alcohol beverage category, including a list of competitors.
- Consumer expenditure. On average, how much money households in Marcy spend a year on alcoholic beverages (by type of alcohol). The report also showed the forecasted growth over the next five years.
- Competitor locations. The number of other liquor stores that fall within a 10-mile radius of the proposed location. Plus, how much revenue these locations generate annually.
- Average daily traffic volume totals. The report depicts daily average traffic volume counts in miles from the proposed location. It shows what area has the most substantial traffic volume within 2-mile proximity of the location. This is a good figure to understand what opportunities exist for the placement of billboards, store signage, etc.
- Marketing tactics. Where do liquor store shoppers consume media that leads them to take action (TV, PPC, social media, etc.)? Percentages reflect the past year and the past month.
Where you choose to open a liquor store will have a significant impact on walk-in traffic, public awareness, and the potential for future success.
Luckily, by conducting a market analysis with Drive Research, business owners can easily uncover this information to assist in decision-making.
Our clients have also used the final report as a proof of concept for banks and investors. The third-party analysis makes funders that much more confident in backing the opening of a new liquor store.
To conduct a market analysis and feel confident in your choice of liquor store location, contact our market research company today.
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A SUNY Cortland graduate, Emily has taken her passion for social and content marketing to Drive Research as the Marketing Manager. She has earned certificates for both Google Analytics and Google AdWords.
Learn more about Emily, here.