Is it just a matter of zoning laws? Because in strictly economic terms, it seems to me like it would be very advantageous to open a grocery store in a neighborhood that is devoid of them.
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Even if pure economics suggest it’s beneficial to open where there are not competitors, there are other considerations like crime/theft risks, ability to attract and maintain workers in that location, whether product mix would be efficient to sell.
A major chain that has access to the capital to open might decide it’s too risky and profit potential isn’t worth it — the store would be more likely to get robbed/deal with shoplifting; they might have trouble getting qualified workers willing to commute to a bad neighborhood, and those who live there may not be dependable; it’d take extra time/effort to customize product mix for a different income/ethnic demographic, etc.
Conversely, somebody who knows the area well and might be able to better build a store that would cater to the needs of the area might have issues getting loans/capital to open such a store. Banks might view the area as too risky compared to opening elsewhere, and not want to lend. And suppliers might not be willing to extend lines of credit, etc. necessary to keep such a business afloat.
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