During non-holiday periods, business in Hogsmeade was actually not much different from Diagon Alley's. Honeydukes in particular—the Hogsmeade branch did even better than the main shop in Diagon Alley, often packed so tightly that not even water could pass through.
If an entrepreneur wanted to open a shop, they had two choices. They could go to Diagon Alley, but competition there was fierce and rent was expensive. For the same price, they could rent an entire house in Hogsmeade, while in Diagon Alley they could only rent a storefront. Or they could choose Hogsmeade, where there was also no shortage of customers and far less pressure on entrepreneurs short of funds in the early stages.
But after Pomona made a round of the only wizarding village in all of Britain, she recalled something Dumbledore had said: successful places bred more success.
Once the students went home for the holidays, the place quickly became deserted. The couple who owned Honeydukes had already left, with a "Closed" sign hanging on the door. Along the way, she had not even seen a tourist. Aside from the villagers, only a few suspicious-looking people came and went from the Hog's Head.
People often shared a kind of common knowledge that could be called convention. For example, people went to Hogwarts to study; in Diagon Alley, they could buy all the school supplies listed on the shopping lists sent along with acceptance letters or end-of-term report cards; and on Hogsmeade Day, they went to the village with their friends for Butterbeer and bought prank items from Zonko.
When choosing a location for a shop, one could not consider only what benefited oneself. Unless the shop had something special enough to make people go out of their way to visit, customers would still be like pilgrims in