A trade area is the geographic area from which a store draws, or expects to draw, customers.
How it works in retail
It can be estimated using travel times, customer origins, competitor locations and local population characteristics. A destination store may have a different catchment from a convenience-focused shop.
A retail example
A retailer compares the neighbourhoods within a practical drive or transit journey of two possible sites.
What to keep in mind
A circle on a map is a starting approximation. Physical barriers, travel patterns, tourism and online fulfilment can change the actual customer catchment.
Examples are illustrative. Terminology and measurement conventions can vary by business and market.