One of the main indicators of in the study you linked was sales volume, i.e. demand.
> It really doesn't matter that a store can make a healthy profit by serving customers who live in a low income area. If that same store feels that they could make even greater profits by being in an area with wealthier customers
This only holds true if a chain can open a fixed amount of stores. In reality, they can open as many stores as they want provided that the stores operate profitably.
> One of the main indicators of in the study you linked was sales volume, i.e. demand.
Sales is a poor measure of demand, because there are a lot of other factors that impact sales, but stores in low income areas certainly face demand problems in some ways. Demand for expensive products that might sell well in other areas will be much lower in neighborhoods where few people can ever afford them.
A store in a low income area is also insulated since fewer people from outside of the immediate area will come to shop there and many will deliberately avoid shopping there. That's certain to impact sales.
> In reality, they can open as many stores as they want provided that the stores operate profitably.
As long as they can continuously open stores, it would still make them the most money to limit themselves to the most profitable areas right? As long as they have the option to open a new store in a wealthy neighborhood where they can make the most sales and highest profits, why should they open one in an impoverished neighborhood? I live in a pretty nice area and there are five grocery stores within 10 minutes of my house (two owned by the same company), and that's not not counting stores like target/walmart that also sell groceries and are less than 10 minutes away!
Never mind that the paper specifically calls attention to profitability, you seem to believe businesses have access to unlimited capital, provided they can show a profit?
> It really doesn't matter that a store can make a healthy profit by serving customers who live in a low income area. If that same store feels that they could make even greater profits by being in an area with wealthier customers
This only holds true if a chain can open a fixed amount of stores. In reality, they can open as many stores as they want provided that the stores operate profitably.