Soft Economy Equals More Coffee Shops

October 14, 2011

Why does a challenged economy lead to more coffee shops? The example of New York City may provide some answers. As the economy slows, it seems that every small chain, plus new ones, are opening outlets in Manhattan. Though Starbucks inspired the appreciation for a third wave coffee culture, as it accustomed customers to a “taste beyond watery diner coffee and the traditional ‘regular’ cup from street carts, laden with milk and sugar”, it’s now seeing competition on its own playing field.





According to Alison Gregor from the Ledger, it is the availability of lower retail rents, plus the public’s apparently infinite thirst for high-end coffee that are partially fueling the demand for more coffee shops. Along with the better rents is the need for landlords to accept more types of businesses in their building rather than maintain empty space. Even a smelly coffee business is better than nothing, the article implies. After all, high-end and third wave coffee shops have shown themselves to be winners, and a stable business has got to be attractive to the landlords. Also, the weak economy means more people are out of jobs.





What does a newly unemployed worker do with his unemployment funds? Open a coffee shop, of course. Maybe every entrepreneur thinks they can be the next Starbucks. Besides new shops, small chains are expanding all over Manhattan, some coming from as far away as Australia. As one shop owner states, “It’s a good time to be in coffee. Especially Manhattan is really awakening to some more careful roasting, and interesting flavors and a more professional cadre of baristas making their drinks.” The prime location for high volume sales is near office buildings, but neighborhood shops can do well if they augment coffee sales with pastries etc. Real estate brokers say, though competition is strong, the demand is there. “There’s always somebody a block away, but there still seems to be room for more.” And, as Gregor states, New York is a city that never sleeps. Brew on NYC, 24-7.



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