@GaussZ

I've not been to Brick Lane but there are similar areas in Chicago. Chinatown has endless Chinese restaurants on the south side. Devon Avenue on the north has curry place after curry place.

These exist for a few reasons.

First, immigrants often naturally group together in certain areas of a city. This is very true of Chicago if you study the demographic profiles. It is not surprising that people want to open a business in the community they live in and eat food they are familiar with.

Second, these streets become destinations in and of themselves. "Let's go get some curry up on Devon Ave (Chicago) or Brick Lane (London)." You may not even have a particular restaurant in mind - you just go there and see what you find.

I would guess that those restaurants are able to survive because they exist in a community where there is high demand for their goods.

Those businesses are competing with each other but there is enough demand for their product in one area that they can all stay open.

Going back to the beach analogy it is like everyone on the beach wanting a LOT of ice cream AND people travelling to the beach because it is known for its great ice cream (presumably they know how to make the best ice cream, curry etc).

Back to my earlier comment, restaurants do like being next to one another and they would prefer if the product is different. Why?

Imagine there are two retail spaces available in a town that has no restaurants. You want to open a curry restaurant in one of the spaces and sign a lease with the landlord to do so. Ideally you are the ONLY restaurant in town. If people want to eat out they have to come to you. Now the landlord wants to lease out the other space - what would you like to see there most? Another Curry Restaurant, a pizza place, or an ice cream shop?

I can tell you for a fact that fast casual restaurants in the USA love being next to a Starbucks because people got to Starbucks everyday. That means if you sell sandwiches people know exactly where you are. They see you everyday and you are right next door to one of their favorite establishments etc.

@newtboy

That is pretty much correct. I've met with the Starbucks people a few times and know people who have worked there or with them.

It is similar to the restaurant discussion above. Everyone wants their coffee at the same time and they can only turn them out so fast.

In addition they want you going to Starbucks, not the Dunkin that is closer to your office.

They may also be in transition in that market - a corner spot may have opened up so they leased that in addition to their two other stores.

Every major retailer crunches a lot of data when picking stores. The metrics are usually very good at predicting sales / market share.

@ant This happens pretty frequently. It works when the market is big enough (demand) to support both of them.

Taking it back to the video - a very crowded beach could support two vendors right next to each other.

This is why retailers love good population density.

@entr0py

The premise is not off at all. Starbucks simply skipped all the moving around steps and located in the "middle of the beach" where the existing coffee shop already was, because (it is likely) that is the best spot in the market.

Starbucks, or any business, does not open to "drive them out of business" they open a store to sell their goods and make a profit.

As someone who has worked with several retailers in very aggressive market sectors (pizza, fast casual, etc) I can tell you that the two vital components to any successful retailer/restaurant are 1) Good location 2) Good Operations. A good location means your customer will see you and get to you. Good operations means once they are there they will be served well.

More often then not when we start working with a new client we look at their competition not because we want to "drive them out of business", but because they have already looked at and evaluated the market. We then evaluate their locations and see if that is still the correct location or not. Markets shift for a variety of reasons - housing growth, retail expansion, major retailers relocating, etc.

"It's easier to steal someone else's customer base than try to create your own." Really? I find this to be the silliest argument. There is a limited amount of money people are going to spend on a product. Lets say a town will spend $1000 a day on coffee. If you open another coffee shop they are not going to spend an additional thousand. The $1000 is just going to be divided up. Maybe there is a slight increase because of access, but by and large people are only going to spend so much. Furthermore, people are creatures of habit. They are actually more likely to continue to go where they have been going unless you offer something better. That better might be a combination of easier access, faster service, a nicer interior, cheaper prices, or better product.

In the city I work in there are several grocery chains expanding and opening new stores. Does that mean people are spending more on groceries? No. What has happened is the grocer with the weakest operations closed. Those locations (over 30) have since been taken over by a variety of both national chains and local independent grocers (all who have better operations). This competition has meant better prices and service for customers.

I buy my coffee a block from my house (and I usually just buy the beans they roast on site) from a local shop. It doesn't bother me in the slightest that other people choose to go to the Starbucks up the street. The coffee I buy is better and I pay a premium for it.

Edit: One last thought - Among the many competitive advantages corporate users have is that they can operate at a loss or lower profit than many "local" stores. That being said the same is not quite as true from franchisee business owners (who have different advantages, hopefully).

@Shepppard

Restaurants like to be next to one another so long as they are different products. It creates a "food destination". Preferably lack of availability or a restriction would prevent users that have a product that is very similar.

Ever notice how most retail developments only have one coffee shop or one sandwich shop? Retail users ask landlords for an exclusive use. For example, Starbucks or Dunkin Donuts will say they can be the only store that sells coffee in a shopping center. Another restaurant may serve coffee as an incidental use - that is it can't be the central part of their business. This makes it harder for a new user to enter an established market.

You seem to be fixated on peak capacity of sit down restaurants. Restaurants have to complete their own analysis of how much square footage to have to accommodate the heaviest dining times, but still cover their costs when seats sit empty. Each square foot adds to their cost.

This video is very accurate in describing how users evaluate and respond to competition within a market.

I have worked in commercial retail brokerage for the last 10 years with several national users - pharmacies, banks, restaurants, and general retail use.

As a final comment, users can and will move. People do not notice as much but retailers relocate when they must to stay competitive or to block another user from coming into a market.

@enoch

Currently I'm paid mostly via commission. I work for a small company where my boss/partner and I work completely independent of any management. I have in the past been paid hourly, biweekly, etc.

It is a stretch to call people slaves, livestock, etc when they are working and exchanging goods and services in a market like ours. Granted there are inequalities, manipulations, and individuals or groups who operate with little morality.

It is a further stretch to blame government for abuses like Abu Ghraib. If 11 or so soldiers commit terrible acts. Does that mean all soldiers are bad? That the government of the country they were from are bad? It just doesn't follow.

The speaker is confused about a lot of things. Democracy is a livestock management approach? What?

Statism is not an excuse for violence. Ignorance and intolerance are. Statism is a general term.

I studied English and Philosophy in school and have continued reading a lot of utopian/dystopian literature since. My familiarity with economics and economic history pales in contrast, but the close relationship with subjects I am interested in has caused me to spend some time and consideration learning what I can.

That said, when I see a video like this I lump it into the same pseudo intellectual/science/news that things like Bill O'Reilly, TYT, Kirk Cameron, Creationists and bigots bring to mind.

Why did I watch this? Well I'm open to listening to legitimate and informative critiques of socioeconomic systems. If they are particularly good it can lead to all sorts of follow up questions and inquiries. I get bored while i'm "slaving" away at work so I put things on in the background...

Then there videos like this. There are very few facts throughout the entire video. The analogies used are misleading. The terrible acts and downfalls of groups, individuals, or particular ideologies are often blown out of proportion entirely. There is no nuanced investigation, no insights, nothing but a self satisfied narrator with droll delivery.

Thanks for rummaging through my videos for dead links. I'll pass on using my downvote on this video.

These videos have about as much going for them as the religious ones that disprove evolution by citing the banana.

Weak.