Why Another Location? What Business Expansion Says About Carlsbad

By Jeff Campbell, Carlsbad Department of Development

When a new business is announced in Carlsbad, there is understandably a lot of excitement, especially when it is a restaurant, retailer, or service residents have wanted for years. But what happens when the announcement isn’t a brand-new name? Sometimes the reaction is different.

Why do we need another one?

Don’t we already have that business?

Those are fair questions. From an economic development perspective, a company choosing to open a second, or even third, location in Carlsbad can tell us something important about the strength of our market.

Businesses Expand Where They Believe There is Opportunity

It is easy to assume that two locations simply divide the customers who were already going to one. In many cases, that isn’t how businesses view expansion. Companies study customer demand, traffic patterns, demographics, accessibility, growth areas, competition, and sales performance before committing capital to another location.

A second location can reach customers who may not regularly visit the first one. It can shorten drive times, serve another side of town, increase capacity, and make the business more convenient for residents and visitors. In other words, the company isn’t necessarily looking at the same pie and cutting it into smaller pieces. It may believe the pie is getting bigger.

Carlsbad’s Market Is Bigger Than a Population Number

This is particularly important in Carlsbad. On paper, Carlsbad can appear to be a relatively small market. Current demographic data puts the city’s population at roughly 35,000. But a population figure alone doesn’t tell the whole story of our economy.

Carlsbad serves a much larger regional population, while our economy also brings workers into the community and generates significant commercial activity. Tourism adds another layer. More than half a million visitors come to the Carlsbad area annually, driven largely by Carlsbad Caverns National Park and other regional attractions.

In the 2024 National Park Service Visitor Spending Effects Report, 460 thousand park visitors spent an estimated $35.7 million in our local region while visiting Carlsbad Caverns National Park. These expenditures supported a total of 335 jobs, $12 million in labor income, $22.3 million in value added, and $38.5 million in economic output in local economies surrounding Carlsbad Caverns National Park.

Those people eat at restaurants. They purchase fuel. They shop. They stay in hotels. They use local services. That activity matters when businesses evaluate whether the Carlsbad market can support another location.

We’ve Already Seen It Happen

Carlsbad has experienced this type of expansion before. Over the past several years, companies including Taco Bell, Domino’s Pizza, O’Reilly Auto Parts, McDonald’s, and Dollar General have added multiple locations in the Carlsbad/Eddy County market.

That is significant because an existing business has something a prospective new business doesn’t: actual experience in the market.

They know their sales. They know their customer counts. They know their operating costs. They know the challenges of doing business here. And after seeing those numbers firsthand, some have decided to invest more.

That makes an additional location more than simply another storefront. It represents a business making a financial decision that there is enough opportunity in this market to justify further investment.

Convenience Creates Additional Business

Carlsbad’s geography also matters. People do not make every purchasing decision based solely on which businesses exist in town. Convenience plays a major role. Where do they live? Where do they work? Which route do they take home? How far are they willing to drive for lunch? Is the business on the side of town where they already shop?

A second location can capture customers who may rarely visit the first. This becomes increasingly important as residential and commercial development spreads into different areas of the community. What was once one concentrated customer base can gradually become several distinct pockets of demand. For businesses, putting another location closer to those customers can make economic sense.

Repeat Investment Is a Form of Confidence

Perhaps the biggest misconception is that another location somehow represents a missed economic development opportunity. That instead of getting “another one,” Carlsbad should have received an entirely different company. Economic development doesn’t work that way.

The decision by an existing company to expand and the recruitment of a new company are not mutually exclusive. In fact, existing successful businesses can help demonstrate the strength of the market to companies considering Carlsbad for the first time. Carlsbad has added numerous hotels, restaurants, retailers, and other commercial businesses since 2010, while local entrepreneurs have continued investing as well. Some new businesses have experienced exceptionally strong opening sales compared with their other New Mexico locations. Every successful expansion adds another piece of evidence to the story we can tell prospective businesses: Companies can succeed here.

So, Why Do We Need Another One?

Maybe that’s not quite the right question. A better question might be: Why does this company believe Carlsbad can support another one?

The answer can tell us quite a bit about our economy. Businesses don’t typically invest significant amounts of money in additional locations simply because they can. They do it because their research, experience, and expectations tell them there is an opportunity to grow. For Carlsbad, that’s important.

Economic development isn’t only about bringing businesses to our community that have never been here before. It’s also about creating an environment where the businesses already here want to stay, invest, hire, and expand. So, when a company decides that one Carlsbad location isn’t enough, we shouldn’t overlook what that decision represents.

It’s another investment in Carlsbad, and another indication that a business believes our market is worth betting on.