Selecting the Optimal Location for a Trader Joe’s Food Store in Colorado
Your Name: _______________________________
Summary
What factors are important when expanding a chain
into a new area? Examine these questions and others
in this lesson that uses Trader Joe’s food store as an
example. Note that this activity is fictitious and should
only be used for educational purposes. However, it is
grounded in reality: At the time of this writing, the
company described in this document was planning to
expand its market to include a store in Colorado.
Furthermore, the considerations raised in this lesson
are very real ones worked through on a daily basis by
businesses worldwide.
Metadata
This activity uses Community Analyst, web-based GIS
software, from Esri. This 30-question lesson is
targeted toward university level learners; but could be
used with upper secondary students; estimated time
for completion: 1 to 2 hours. Community
Analyst requires a license to use. There is a trial
version available on www.esri.com.
Map showing the locations of Trader
Joe’s markets that you will create as a part
of your analysis for this activity.
Problem
Hearing about your excellent GIS and spatial
thinking skills, the Chief Executive of Trader Joe’s
has hired you to recommend the best location to
site a new location for a Trader Joe’s food
market in Colorado. You will use Community
Analyst and spatial analysis as an integral part of
your investigation.
Procedures
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Trader Joe’s store in Redlands, California.
Photograph by Joseph Kerski.
(1) Access Community Analyst
(http://communityanalyst.esri.com). Make sure you are zoomed to the conterminous United
States.
Siting a Trader Joe’s Food Store in Colorado - Page 1 of 4
Author: Joseph J. Kerski – jkerski@esri.com
Copyright © 2012, Esri. http://edcommunity.esri.com
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(2) The first thing you need to do is determine the location of existing Trader Joe’s food
markets. Select the Explore Community tab  Business Search  Enter “Trader Joe’s.” Pause
while the locations of this business are accessed. Scan the list. What states are most frequently
seen in the database? Pick a 12 point black circle symbol and “add selected locations.”
(3) What pattern do you notice? How would you characterize the extent and pattern of Trader
Joe’s? Would you say that Trader Joe’s is a regional or a national chain of stores?
(4) What metropolitan area seems to have more Trader Joe’s than any other? Indicate it and
the state as well.
(5) In what city and state do you hypothesize that Trader Joe’s headquarters is located? Why?
(6) Do some research online about Trader Joe’s. What kind of business is it? What is their
target market? What is their corporate vision and strategy?
(7) Where is the headquarters of Trader Joe’s? Is it near where you hypothesized it would be?
(8) How is Trader Joe’s different from other grocery stores? How is Trader Joe’s different from
another well-known natural foods store, Whole Foods?
(9) Notice the lack of Trader Joe’s in the mountain west, south central, and Great Plains regions
of the country. Of these states, list 3 that you feel would be ideal states for Trader Joe’s to think
about expanding in. Why did you choose those states?
(10) Let’s analyze some characteristics of those states to further refine our analysis. Use
Explore Community Create Color Coded Map  Choose Variables  Search on “2010
Population”. In the results window, expand the 2010 population category and select 2010 Total
Population (Esri). Describe the pattern (your map should look similar to the map on the
previous page). What are the three most populous states in the mountain west, south central,
and Great Plains that currently have no Trader Joe’s?
(11) How does Colorado rank in terms of the states you listed above in 2010 population? Does it
make sense to place a Trader Joe’s there?
(12) Zoom in to points of your own choosing around the country to find five locations where
existing Trader Joe’s are located. Zoom to the scale such that you are looking at 2010
population by zip code. Hover over the zip codes to obtain their population. What is the
average population of these 5 zip codes that you have chosen that contains a Trader Joe’s?
(13) Based on your assessment, what is the approximate minimum threshold in terms of
population by zip code for a Trader Joe’s?
(14) Obviously, total population is not the only characteristic that will help you determine
where to recommend siting your new store. Again, select Choose Variables  2010 Median
Income. Pan to Phoenix, Arizona, or search for Phoenix, AZ using the Select Location  Find
Location tab. Make sure you are still looking at the zip code level. What is the relationship from
the map of median income to the location of Trader Joe’s? Do the stores tend to exist in areas
of higher income or lower income? Do exceptions exist?
(15) Compile a list of the median incomes for the 10 zip codes that contain a Trader Joe’s. What
is the average of these median incomes by zip code that contain a Trader Joe’s?
Siting a Trader Joe’s Food Store in Colorado - Page 2 of 4
Author: Joseph J. Kerski – jkerski@esri.com
Copyright © 2012, Esri. http://edcommunity.esri.com
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(16) Pan to another metropolitan area containing several Trader Joe’s. Does the pattern of
income vs. store locations hold up for that metropolitan area as well?
(17) Neither total population nor median income give the complete picture of the consumers in
neighborhoods. Choose variables again, and search on “Tapestry.” The tapestry segmentation
give a “picture” based on demographic, lifestyles, and consumer behavior of neighborhoods.
Pan to Las Vegas, NV, or search for Las Vegas, NV using the Select Location  Find Location
tools. Zoom out to the scale where you are looking at zip codes. Identify the 2 tapestry
segments that you believe are most common to where Trader Joe’s are located there.
(18) Read the description of the 2 tapestry segments you have just identified on the Esri
Tapestry Segmentation document:
http://www.esri.com/library/brochures/pdfs/tapestry-segmentation.pdf Describe in your own
words what these neighborhoods are like.
(19) There are other factors that influence the location of a successful new business. Zoom
into 2 locations of the Trader Joe’s in Las Vegas. Use My Layers and select “None” to turn off
the Tapestry data, and change the base map to Satellite. What types of streets are Trader Joe’s
located on? What is the proximity of the stores to major freeways?
(20) What is the land use like in the neighborhoods surrounding the stores? Are the stores
standalone or are they located in strip malls or otherwise in larger buildings with multiple
tenants? What is adjacent to the stores, and across the street?
(21) Now you’re ready to turn your attention to Colorado. Turn back on the 2010 Total
Population using the My Layers tab.
Using skills that you have gained
above, answer the following
question, while examining the state
at the zip code level: Where are the
major population centers located in
Colorado?
(22) Turn on the 2010 Median
Household Income. How does the
pattern of 2010 median income vary
by zip code?
(23) Turn on the 2010 Dominant
Tapestry Segment and also skim the
Esri Tapestry Segmentation
document again. What 3 tapestry
segments do you believe would
make the best to consider for your
Trader Joe’s location?
(24) Zoom to the state of Colorado,
since you will now do a search.
Searching generally uses the extent
of your map when it operates. The location of your competitors is another valuable component
to examine. Explore Community Business Search, and enter “Whole Foods”. Whole Foods is
Siting a Trader Joe’s Food Store in Colorado - Page 3 of 4
Author: Joseph J. Kerski – jkerski@esri.com
Copyright © 2012, Esri. http://edcommunity.esri.com
a food store that focuses on organic and natural products. In some ways, it can be considered a
competitor to Trader Joe’s, although there are many differences in the stores’ product offerings
and philosophies. Describe the pattern of the Whole Foods that you see. Your map should look
similar to that at right.
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(25) Turn off any variables that you are mapping, such as Median Income, and turn off Whole
Foods’ locations for the moment. Examine the major roads of Colorado. Discuss the pattern of
major roads in Colorado. What roads might you want to target for your Trader Joe’s location?
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(26) Change the basemap to “satellite”. Discuss the terrain in Colorado and how it affects
population settlement in the state. What towns and terrain might you want to target for your
Trader Joe’s location?
(27) Now you are ready to choose the optimal site for your store location. Considering terrain,
population, median income, tapestry segmentation, major roads, and terrain, choose the top 3
locations for your store. Rank them from 1 to 3, with 1 being the ideal location. Indicate the
city and intersection where each is located.
(28) Write a summary of your top 3 locations, indicating why you chose each of them, and why
you ranked them the way you did.
(29) Using the scale bar, answer the following questions: How far is the nearest Whole Foods
from each of your proposed Trader Joe’s locations?
(30) Summarize what you have learned about locating a store using the spatial perspective, and
how Community Analyst GIS has helped you to visualize and understand spatial patterns. Give a
5-minute presentation to your colleagues covering what you learned, using your maps as an
integral part of your presentation. [Note that Community Analyst provides tools for creating
screenshots or PDFs of your maps, or you can use Community Analyst in “live” mode].
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Additional Resources
For more information on business and GIS:
 The Esri Guide to Spatial Analysis, Esri Press.
 GIS Tutorial for Marketing, Esri Press.
 The GIS Guide to Public Domain Data, with 10 exercises; Esri Press.
 Esri Business resources, case studies, and more:
http://www.esri.com/industries/business/index.html
 ArcLessons: http://edcommunity.esri.com/arclessons – such as siting an Internet café in a
metropolitan area, and more.
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Siting a Trader Joe’s Food Store in Colorado - Page 4 of 4
Author: Joseph J. Kerski – jkerski@esri.com
Copyright © 2012, Esri. http://edcommunity.esri.com