Is it bad to have other coffee shops near my coffee shop? Tell me about competition.

A lot of coffee shop operators would assume it is generally bad for two or more coffee shops to be located near each other (let’s say anywhere from one block to 2 miles). And it’s totally understandable why one would imagine this. Reverie Coffee Roasters has been situated near at least one other coffee shop and coffee roaster for nearly all of our existence (10 + years). And in that time, we have always seen an upward trend in sales year after year (except for covid when we all got our knees knocked out from underneath).

Coffee shop customers will sometimes drive all the way across town for a great cup of coffee. This is what you would call a destination business (for those customers). But the majority of your everyday customers will frequent your business because of proximity (how close) to where they live or where they work. This means that when competition arrives nearby, they don’t necessarily take all your customers. They often grab new customers that are closer to their location.

There is definitely a risk of losing some of your customers to a rival competitor down the street. This is normal. And it’s not always because of proximity. If you’ve done a great job of making people aware of great coffee, they are naturally going to want to try other new coffee shops, especially if they are located nearby. In some cases, though, you may lose a customer because they find the competitor to have more of what they are looking for; product, comfort, hours of operation, etc. A loss you couldn’t have always predicted or prevented.

In our experience at Reverie Coffee Roasters, we have almost always seen an increase in sales after a new shop opens up, not a decrease. Why would that be? We have hypothesized on this phenomenon and have come to the conclusion that by having “more” good coffee in the neighborhood, we are increasing the number of people who are aware of it. You see, nearly 80% of adult Americans drink coffee, with 50% drinking coffee every day. The assumption is they are changing “where” they drink coffee when these sales go up.

It's easy to think there is a small pool of customers we are after. But in fact, the potential audience is much larger than we could ever manage. In our community of nearly 600,000 residents, Reverie routinely serves around 10,000 customers every month, including new customers and our regulars. And with that understanding, we have so much more to gain by working with the coffee community than against it.

The last thing is that with competition comes an urge to rethink your strategy. Reverie Coffee Roasters has almost always been able to improve because we have felt the threat of a squeeze by our competitors. Competition always makes us better. And for that reason, we are okay with it. So, don’t be too scared if you read one day there’s a new kid on the block. At the time of this article, we have seven coffee shops and one coffee roaster within two miles of our main café and sales have never been as good as they are right now.

If you have any questions about coffee competition in your business neighborhood and would like to reach out, follow the link below. Our team lead would be happy to share our thoughts with  you, perhaps over a cup of coffee.