Settlements within an area vary greatly in physical size, population and the number of services that they provide. When studying settlements within an area we can look at them in terms of a settlement hierarchy. A settlement hierarchy is when settlements are put into an order based upon their size or the services that they provide for people (see hierarchy diagram below). As you go up the hierarchy there is an increase in the size of the settlement, population and number of services; the distance between these settlement types also increases. The number of settlements of each type however decreases as you move up the hierarchy.
Settlements in the hiearchy are interdependent as people will use a variety of services found in different settlements. The area served by a particular settlement is known as its sphere of influence. The size of this will be dependent not only on the type and number of services offered by a town but also the size of the town and the ease of access related to the available transport networks serving the area. Villages usually provide few services, and those that exist are mainly low order services or sell low order goods. Low order goods / services are those that are low in value / cost and are used / required daily, for example milk / newsagents. Larger towns and services will have a greater range of services, including both low order and high order goods and services. High order goods and services are more expensive in nature and not required so frequently. They are often comparison goods, such as furniture, electronic goods etc. and people are usually prepared to travel further in order to get them. The distance that people are prepared to travel to use a service or obtain a good is known as its range. Services such as hypermarkets and goods such as furniture have a much greater range than for example a newsagents and milk.
In order to be profitable, a shop or service will require a minimum number of potential customers, this is known as its threshold population. Shops/services providing low order goods or services usually need a much lower threshold population (as the goods / services are required / used daily), whilst high order shops / services will require a much greater number of potentail customers and thus have a higher threshold population. Marks and Spencers for example may require a threshold population of 70,000 before the store can be profitable.
The needs of local communities are often provided for by neighbourhood shopping centres. These consist of a group of low order shops and services, e.g. a newsagents, bakery, hairdressers etc. serving an area within a town, for example Kings Hedges, St Ives. Out-of-town shopping centres which usually contain higher order shops, including large chain and department stores have increased in number and size significantly over the last 20 years or so and in doing so have had a negative on some nearby town centres.