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June 19, 2008

Too many coffee shops?

Update: I heard back from Mike Sebolt, who said that he and Kathy Johnson sold High Point Coffee because it was too difficult to make ends meet financially soley on his income, since Johnson was managing the coffee shop. He also said the economy was a challenge.

About the number of competiting coffee shops, Sebolt said in an email that "There are quite a few but we always felt we had something really unique and special."


Can we ever have too many?

Mike Sebolt and Kathy Johnson delved into the coffee retail business in 2007 with high hopes. Their coffee shop, High Point Coffee, may not have turned out as they expected.

High Point on Brambleton Avenue in Roanoke County has closed, and Doreen's Gourmet is taking over. Check out the details on the SWCo blog.

Sebolt told me that Johnson has taken a new job as a guidance counselor at the Governor’s School. When they opened High Point, she quit her job as a guidance counselor at William Byrd High School to manage the shop. Sebolt’s still a teacher at Salem High School.

It’s unclear why they decided to sell High Point. Sebolt didn’t respond to questions about their decision. Perhaps it was a way for Johnson to go back into an education-related career.

But it's also no secret that the local coffee retail business is extremely saturated.

There are five Starbucks in the Roanoke Valley and locally-owned coffee shops galore. Mill Mountain Coffee & Tea has four shops, and Mojo Café and Brambleton Blend aren't too far from High Point’s former location on Brambleton Avenue. There also are two Daily Grinds, one on Electric Road and another in Salem. And don't forget several Java the Hutt drive-through kiosks.

High Point's closing raises questions about its ability to withstand so much coffee competition.

Comments

# 1

[June 19, 2008 2:39 PM]

dean

Jenny, you forgot to mention the other two Starbucks in Salem.

# 2

[June 19, 2008 5:52 PM]

Jenny

Hey, Dean, You're right. I did forget to add a Salem Starbucks, the one beside Blockbuster Video. The number five includes the Starbucks on West Main Street in Salem. So, there are six Starbucks in the Roanoke Valley. Thanks for checking!

# 3

[June 20, 2008 10:53 AM]

Metropolitan

To me, having a large number of coffee shops is a sign of civic maturity.

In contrast to the six Starbucks and a handful of other shops, how many spots serve beer or mixed drinks in the Valley? No value judgement there, just a point to consider when asking how many coffee shops is too many.

# 4

[June 21, 2008 10:07 AM]

Richard Hippe

Don't forget the Coffee Cafe at both Barnes & Noble that feature Starbucks Coffee as well!

# 5

[June 21, 2008 7:32 PM]

NRNVA Citizen

Everyone also misses the facts 1> Not everyone likes or drinks coffee 2> You can still buy and brew at home (even the stale Starbucks brand) 3> Every fast food joint and gas station offers inferior coffee at the same price (with cool airpots and cups to fool the novice), 4> there are multiple other caffienated drinks on the market today to choose from and 5> many people see caffiene as a negative to a healthly life style (whether true or not)

# 6

[June 23, 2008 10:34 AM]

Bob

It's simple math. When you begin to split a finite pie infinitely...... a natural dilution of the market will result. Combine that with the publics' perception of a sluggish economy and record gas prices that result in higher cost of goods, the pressure brought on by overhead for an independent is immense. No degree of quality can overcome a lack of volume of sales.

In my view, the root cause lies in two areas. Roanoke has always suffered from "urban envy" and confuses the larger chains as the standard of quality by which others should be judged, and the paragon of hipness- (I know, dating myself here..) when in fact the truely urban hip take pride in discovering the unknown, out of the way little places no one knows about. As NRNVA Citizen has pointed out, the new outlets (ie. gas stations, corporate chains) for "quality, hand-crafted coffee" have done an incredibly good job of blurring the lines and confusing an easily swayed public.

Secondly, only 10% of the coffee drinking public understand, demand and are willing to jump through flaming hoops for true quality. For the other 90% good enough is just that- good enough. Nothing wrong with this, just an argueable fact. Quality driven independents are now left to compete over that 10% and hope that they are convenient to at least some of the 90%ers. So, it's a small pie to begin with. Newer entrepeneurs would do well to remember that times have changed the business model. Quality in and of itself is no longer a concept, it is a basis for a concept. Where it is taken from there will determine whether or not they'll be around next year. This is not just this business, it is every small business going through the enevitable cycles. Remember all the great hardware independents whose business model was based on quality and service?

Sorry for the long post but this is something close to my heart...... and my wallet:-))

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