Short answer
In the most rural parts of the Great Plains, it took about 950 residents to support one full-service restaurant and about 1,550 to support a grocery store (2005 data). A gas station with a convenience store is among the easiest businesses to support. Chain stores like Dollar General and Bi-Mart pick sites by the population within a short drive, not by the town’s size. In a tourist area, visitors and highway traffic can make up much of the gap, so count them too.
Last reviewed November 3, 2026 by McKenzie Community Partnership. Applies to small towns and unincorporated communities under about 5,000 people. Part of the Small-Town Economics series.
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What is a “threshold population”?
A threshold is the smallest number of people who can keep one business of a given type open. It counts everyone who shops there, from the town and the countryside around it. A second business of the same type usually needs more than twice the first one’s number, because the two split the same customers.
How many residents do common businesses need?
These figures come from South Dakota’s 35 most rural counties, using 2005 business counts.
| Business | Residents needed for one |
|---|---|
| Full-service restaurant | 953 |
| Grocery store (not convenience) | 1,552 |
| Bar or tavern | 1,749 |
| Hotel, motel or B&B | 1,771 |
| Fast-food restaurant | 2,607 |
| Electrical contractor | 2,820 |
| Sporting goods store | 23,027 |
Rural residents there have less to spend, which raises the number of people each business needs. A sporting goods store needed about 23,000 people, which is why such stores sit on busy highways. Use the figures to check whether an idea is in range, not as a forecast.
What about chain stores?
Chains run their own site studies, and they look at the whole trade area within a short drive.
- Dollar General: about 80% of its stores serve towns of 20,000 people or fewer. It looks at a 3- to 5-mile radius, or about a 10-minute drive, plus traffic and nearby competition.
- Bi-Mart: an employee-owned chain based in Eugene. Its stores average about 30,000 square feet, and a new store in Sisters, Oregon, employed about 45 people. Like other chains, it needs a big enough trade area and space for a large building.
- Liquor stores in Oregon: the Oregon Liquor and Cannabis Commission (OLCC) chooses new store locations itself. It looks at population, roads, zoning and the distance to existing stores. A community can’t simply open one; it can ask the OLCC to study the area.
How do I check a business for my own town?
Turn people into dollars, then compare them with the sales the business needs.
- Count households within a normal shopping drive. The U.S. Census American Community Survey gives counts by ZIP code.
- Multiply by what an average household spends in that category (table below).
- Multiply by the share people will spend locally instead of in the nearest city. In a small town, 25–40% is a common starting guess for groceries.
- Compare the result with the sales a business of that type needs. Add visitor spending (see Guide 2) if you’re in a tourist area.
| Category | U.S. household spending, 2024 | What one business needs (rough) |
|---|---|---|
| Groceries (food at home) | $6,224 | Rural North Dakota grocers average about $20,000 a week (about $1 million a year) |
| Eating out (food away from home) | $3,945 | A small independent restaurant averaged about $1,270 a day (Womply study of U.S. small restaurants) |
| Gasoline and fuel | $2,645 | The average U.S. convenience store sells about 135,000 gallons a month |
| Alcohol | $643 | A small-town Oregon liquor store (Athena) sold about $295,000 in spirits in 2025 |
Coffee shops and bakeries aren’t broken out in the spending data. Independent cafés often plan for 150–250 sales a day, so morning traffic matters more than the town’s size.
A worked example
Take 400 households, roughly what Blue River’s ZIP code 97413 holds today.
- Groceries: 400 × $6,224 = about $2.5 million a year. If 30% is spent locally, that’s about $747,000, or $14,400 a week. That’s below a typical rural grocer, so a store would also need visitors.
- Restaurant: 400 × $3,945 = about $1.6 million. At 25% local, that’s about $395,000, or $1,080 a day: close to one small restaurant.
- Gas: 400 × $2,645 = about $1.06 million, or roughly 22,000 gallons a month at $4 a gallon. That’s about one-sixth of an average station’s volume, so highway traffic has to carry it.
These households earn less than the U.S. average, so the real numbers are likely lower (see Guide 2).
On the McKenzie River
- ZIP code 97413 (Blue River and McKenzie Bridge) had about 757 residents in the 2023 Census estimates, with a median age of 58.
- Blue River itself had about 200 residents in 2025, down from about 280 before the 2020 Holiday Farm Fire.
- Highway 126 carries about 2,600 vehicles a day at the Blue River bridge (2022).
- Ask the Oregon Liquor and Cannabis Commission about a liquor outlet, and the McKenzie River Chamber of Commerce about local business data.
Outside Oregon
Your state’s land-grant university extension service (for example South Dakota State, Iowa State or Missouri) may have published threshold studies. Census County Business Patterns lists how many businesses of each type exist by ZIP code. Compare your town with towns of similar size that already have the business you want.
Frequently asked questions
Does a bigger population guarantee a business will succeed?
No. The owner, the location, rent and competition from the nearest city matter as much as the head count.
Why do chain stores show up in towns smaller than the threshold?
Chains count the whole trade area, not just the town. They also run on lower costs and buy in bulk, which lowers the sales they need.
Can a community help a grocery store survive?
Yes. Towns have kept stores open through cooperatives, community-owned stores and shared buying with schools or clinics. Kansas State University’s Rural Grocery Initiative collects examples.
The Small-Town Economics series
- How many people does it take to support a grocery store or restaurant? (this guide)
- What income and spending does a small town need?
- Where do jobs come from in a small rural town?
- Workforce housing vs. low-income housing: what’s the difference?
- What brings remote workers to a rural town?
Sources
- SDSU Rural Life Census Data Center: Threshold Levels for Selected Rural South Dakota Retail and Service Businesses
- U.S. Bureau of Labor Statistics: Consumer Expenditures, 2024
- Civil Eats: keeping rural grocery stores open (North Dakota sales)
- Restaurant Business: small restaurant daily sales (Womply)
- NACS: convenience store benchmarks
- OLCC: the process for new liquor stores
- OLCC: Athena store information sheet
- Zacks: Dollar General’s 2026 real estate plan
- Nugget News: Sisters Bi-Mart opens (2009)
- McKenzie River Reflections: Blue River wastewater study (2024)
- KLCC: Blue River rebuilds (2025)
This guide is general information, not financial, legal or planning advice. McKenzie Community Partnership doesn’t sell anything; we explain your options. Free to copy and adapt; please credit McKenzie Community Partnership.