A new grocery store only helps its neighbors if they are located within 500 feet of the front door.
April 26, 2026
Original Paper
Identifying Agglomeration Spillovers: Evidence from Grocery Store Openings
SSRN · 6609758
The Takeaway
Foot traffic to nearby businesses increases by 23% when a grocery store opens, but this benefit disappears almost immediately beyond a tiny radius. Most city planners view a supermarket as an anchor that can revitalize an entire downtown district. This data shows that the spillover effect is hyper-local and does not reach the businesses just a few blocks away. The impact of these anchor stores was also significantly damaged by the shift to online shopping during the pandemic. Real estate developers must focus on the immediate 0.1 mile area to capture any actual value.
From the abstract
We provide the first large-scale causal estimates of demand-side agglomeration spillovers in the non-tradable service sector, leveraging data on 851 grocery store openings across the United States between 2019 and 2022. We combine a convolutional neural network with propensity score matching to identify credible counterfactual opening sites and compare business outcomes between actual and counterfactual locations. Grocery store openings increase foot traffic to nearby businesses within 0.1 miles