Analysis of retail pharmacy location patterns for neighborhood sites in Salt Lake County

There is a great deal of importance associated with the problem of location analysis, but there is an appreciable lack of adequate methods that can be used by an independent business having limited financial means and inadequate training. Because of this condition, a study was undertaken to determine if any patterns existed which could be used to test future locations. A secondary purpose of the study was to provide limited information on other competitive aspects indirectly related to location. One such example would be an increase in price awareness and the extent to which this has changed customer buying habits in regard to the convenience of a store location. The methodology employed to gain the information was to interview customers as they left six neighborhood independent retail pharmacies in Salt Lake County and determine their place of residence as well as some information about buying attitudes. The information was then punched on Key-Sort cards for ease of tabulation and the addresses were plotted on maps. The area around each store on the map was then divided into quadrants and half-mile increments. The results demonstrated some very definite customer patterns. The quadrant farthest away from the central business district had the largest number of customers (forty-five per cent). Nearly four-fifths (seventy-nine per cent) of the customers live within the first one and one-half miles of the stores. More customers live on the outboard side (sixty-five per cent), the area beyond the store site away from the central business district, than on the inboard side (thirty-five) per cent, the area between the store site and the central business district. Other results obtained from the interviews showed that sixty-seven per cent of the people were at the closest store to their home when they were interviewed, ninety-five per cent drove to the store, sixty-eight per cent did the majority of their purchasing at the store at which they were interviewed, and only sixteen per cent of the people shopped at a store that was not nearest to their home. The average purchase size was |2.52, the average age was 36.3 years, and more men (fifty-two and three-tenths per cent) were interviewed than women (forty-seven and seven-tenths per cent). This latter result is assumed to be due to the time of the day in which the interviews were performed. Definite customer patterns were noted for all the stores surveyed. One should be able to determine the feasibility of a given site with the application of three pattern tests derived. If the tests are affirmative, it is recommended that further evaluation of the site be done before a definite decision to locate is made. If the tests are negative, the costs of further testing can be avoided, Since the average purchase size was relatively small and most of the store's customers lived within a limited area, it is assumed that the convenience-goods concept is still in existence and that large chain drug stores have not greatly influenced a considerable segment of the buying public.