Placement

A long time ago, I noticed that certain stores cluster in the same plaza or next to one another in location. I have learned from this class that this is probably a well-thought out strategy based on market statistics, competition, and brands though I still don’t know the specifics of this theory. To this day, I cannot understand why Chipotle always locates near Qdoba and Caribou Coffee near Starbuck’s. I know that competition is good for business, but doesn’t this placement also drive sales down since the two companies have to split the market share?