Economics of Density can be a solid competitive advantage for geographically impacted businesses like retail stores, restaurants and other local businesses. The core idea behind Economics of Density is that economies of scale in supply chain, marketing & management support are best achieved in tight geographic circles. Its easier said than done because its very hard for businesses to stay focused and expand in a disciplined way. 

Take a look at a really great video about Walmart's expansion strategy. Notice how they expand in concentric circles.

Thomas Holmes, a professor of economics at ...