From The Wall Street Journal:
Too Much Caffeine? Coffee Shops Face a Shakeout
America’s coffee market is getting too crowded.
Consumers’ hankering for caffeine and quality coffee has fueled a big build out of cafes in the last five years, especially in dense urban areas such as New York, San Francisco and Portland, Ore. There are now nearly 33,000 coffee shops in the U.S., including those run by big chains such as Starbucks up 16% from five years ago, according to market research firm Mintel.
The boom in coffee shops is starting to hurt business owners. Consumers are visiting traditional coffee shops less often when there are a plethora of cheaper options. Everyone from McDonald’s Corp. to gas stations is hawking specialty coffee. Even grocery stores are expanding the space devoted to bottled and canned coffee drinks, which Mintel says poses a threat to coffee shops. Traffic growth to large coffee chains such as Starbucks is slowing, while traffic to small coffee chains and independent shops is declining, according to NPD Group Inc.
Not crowded, comoditized. Coffee used to be a specialty item - a luxury - where few people had the taste to discern what they wanted and who was serving it. Now, everything has shifted to some banal middle ground. There are a few old-school places still in existence - here and here - but the majority of places are nothing to write home about.
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