Posts about Coffee Shops
Retail
Is "the rent too damn high" for some DC businesses?
In the coming weeks and months, a handful of businesses along 14th Street NW will close their doors. The retail corridor appears to be booming, but high commercial rents make it difficult for low margin businesses to compete.
Photo by ElvertBarnes on Flickr.
This Saturday, Mid City Caffe on 14th Street will serve its last latte. Citing insufficient sales and a less-than-ideal second floor location above Miss Pixie's, the coffee shop opted not to pursue a lease extension; instead, they will simply close for good.
Perhaps more noteworthy than the closing of the shop itself is the fact that the Mid City brand will not live on. Ownership is not seeking new retail space.
Jeffrey Lamoureux, the shop's general manager, says that decision is driven by the challenging business climate along the 14th Street corridor: "If we were to relocate and hope to capitalize on the customer base and brand identity we've developed since 2009 we would have to find some place within a few blocks, where an affordable rent would be extremely hard to come by."
Earlier in the month word spread that Miss Pixies is in the market for new retail space. It's reported that the building's landlord wants to quadruple the rent for the storefront at 1626 14th Street NW. Jeffrey Lamoureux says that's a problem for businesses like his, where "high commercial rents make places like Mid City, low-volume neighborhood-centric spaces, untenable."
Mid City did have a loyal customer base. The shop was often busy, popular among coffee lovers, and on the surface, appeared to be successful. That's not to say there wasn't enough demand for Mid City Caffe, or that the shop wouldn't be filled with customers if it re-opened nearby, but it does suggest there isn't enough demand to justify the cost of running such a business on 14th Street.
High rents directly impact businesses by raising the average total cost. Barista wages and coffee prices likely don't waver much from city to city, but the amount a coffee shop pays to its landlord every month can and does vary greatly.
The result is that coffee shops in high-rent neighborhoods, for example, face a challenge that coffee shops in low-rent cities and neighborhoods don't: They have to pay handsomely for the privilege of simply being able to open their doors.
In order to make it work, businesses either need to sell high-margin goods and services, or do brisk volume on low-margin items. Coffee is the kind of business where strong volume is key.
That's the strategy at Peregrine Espresso. The successful Capitol Hill coffee brand opened its second location earlier this summer, exactly one block north of Mid City Caffe. Even so, there are notable differences between the Peregrine and Mid City.
Peregrine owner Ryan Jensen says that his shop caters to a different type of customer. "When we found our space up there, we realized that we really didn't have the space to accommodate a sea of telecommuters," he says, "so we thought it best to keep the chairs turning over so that the space doesn't get too stagnant."
With less than 600 square feet of space and enough seats for only about a dozen customers, Peregrine is banking on strong take-out business. They don't have wi-fi and aren't trying to lure customers looking for a place to hunker down for hours.
Jensen acknowledges that high rents make doing business on 14th Street a challenge. "If you only want to serve coffee (not lunch, dinner, or alcohol) and aren't necessarily interested in being a music venue, it becomes very difficult to sell enough cups of coffee to cover high rent," he says, "particularly in a neighborhood that doesn't have the same type of daily pedestrian traffic that you might find closer to downtown or in Penn Quarter.
Peregrine chose its micro-sized storefront in part because, even though the rent is high on a per-square foot basis, the monthly payments aren't astronomical. They also benefited by securing a long-term lease in July 2010, before some of the new developments nearby had broken ground. While small annual rent increases are expected, Peregrine is at less risk of the price shock that Mid City and Miss Pixies are currently experiencing.
High rents impact more than just individual businesses. Topher Matthews recently questioned the future of DC's "third places". In neighborhoods with high rents, the primary concern of any business is covering its costs. No matter what role it plays in the community, if it can't pay its bills, it won't be around for long.
Public Spaces
A new Third Place enhances a walkable space
Life has come to a new, small commercial building on University Avenue in Wheaton after months of construction. First, local favorite poultry eatery El Pollo Rico has finally re-opened at its new location after a fire destroyed its old place of business. Second, there is now a brand new coffee shop, Dejabel Cafe. I could not resist trying a mocha latte. It was tasty. I made sure to return to get an Americano in preparation for a two hour drive to my parents' house on Friday night.
Photo by Ian Britton on FreeFoto.com.
While this is all well and good for my local coffee drinking needs, it is also an important (though small) step in the social and economic fabric of downtown Wheaton. This is walkable downtown Wheaton's first (at least in this decade) non-mall based third place. A few small restaurants and the 24-hour Dunkin' Donuts had partly filled the role of third places. However, no one would choose to go study, read a book, or sit for some relaxing conversation in a take-out or a chain doughnut stand.
Although there are two Starbucks locations in Wheaton, both are in Westfield Wheaton, one in the mall proper and the other in the parking lot adjacent to the Giant supermarket. Neither is as convenient for pedestrians as it is for motorists. The Westfield is also on the wrong side of the pedestrian-unfriendly intersection of University Boulevard and Veirs Mill Road. That intersection is a suburban-style, six-lane monster that a pedestrian never has enough time to cross before another queue of cars comes from another direction. Consequently, that Starbucks functions less like a third place and more like a drive-through window.
Dejabel Cafe has free Wi-Fi, and an ambiance that immediately reminded me of other nice third places, like those in vibrant Adams Morgan. Though not on the same scale, it is a good addition to Wheaton nonetheless. I also like that it is an independent startup with its own unique details. Most importantly, it will be performing a function that is currently underrepresented in downtown Wheaton. It adds diversity of uses to its environment, making the area more attractive to a wider range of people, creating demand for an even greater diversity of uses and businesses. It's a beautiful cycle that any walkable urban place strives for. In her monumental classic book, Death and Life of Great American Cities, Jane Jacobs described how a successful walkable place needs such a diversity of uses. We have seen this cycle play out in other parts of our region, such as Dupont Circle, Logan Circle, U Street, and Clarendon.
I told the proprietor of Dejabel Cafe how I'd been hoping for such a place to open up, because so many other potential third places in Wheaton did not directly appeal to me. He said that he'd heard the same thing from other customers. He's betting that there are many people with my consumer tastes and preferences within walking distance. Wheaton's earlier walkable place was abandoned in the 1980s for the then-new subdivisions farther up Georgia Avenue. It's a slow process, but very enjoyable to watch a new vibrant, walkable place unfold right at my feet.
Development
Dinner links: urban lifestyle vs. bad transportation policy
Photo by M.V. Jantzen on Flickr.
Connect to HowAboutAnEspresso? Freakonomics discovers a clever strategy by a Dutch coffee shop to encourage Wi-Fi-using patrons to keep spending money without actually forcing them: change the network name periodically to things like BuyaLargeLatteGetBrownieForFree.
What Should Obama Do? Activists have created a site to suggest priorities for Obama's to-be-created Office of Urban Policy.
No automaker bailout: Ryan Avent gives many reasons why bailing out automakers is a terrible idea. Our industry in Detroit could transition to green jobs, or making light rail and streetcar vehicles, or one of many other productive uses. Throwing money at them to keep cars rolling off the assembly line only slows that, while deepening our dependence on personal automobiles. Cato agrees.
The depressing West: Arnold Schwarzenegger is dodging the state's Smart Growth law and exempting large sprawl-inducing "stimulus" projects from review; Arizona has no ideas at all about how to pay for any transportation projects.
@ggwash
- Successful speed cameras require fair speed limits
- Amid scandal, don't lose sight of Gray's policy achievements
- Montgomery plans 160-mile, "gold standard" BRT system
- Bethesda gets new but terrible bike racks
- DC's parks are 5th best in the nation, says "Park Score"
- VDOT ignores own data, pushes widening I-66
- DC's divide need not be black and white
Greater Washington
District of Columbia
