The Induced Demand for Coffee Shops

Photo courtesy of Compass Coffee.

In transportation planning there is a concept called “induced demand”. It states that if you build additional supply of something (typically new travel lanes) rather than reducing congestion proportional to the amount of added supply, you will only create new demand which will quickly use up the new supply. It’s hard not to think of that concept when considering the astounding number of coffee shops now open in Georgetown.

The newest is possibly the biggest. Namely, that’s the Compass Coffee, which now occupies the old Georgetown theater building on Wisconsin Ave. Still brand spanking new and it is already full of customers when open.

Consider the number of coffee shops we now have in Georgetown. Defined (by GM) as places you can get an espresso/cappuccino to go (so not simply stores that happen to have a pot of coffee), here’s what we’ve got:

  • Starbucks at Wisconsin and S
  • Starbucks at M and 34th
  • Starbucks at M and Thomas Jefferson
  • Starbucks at Washington Harbour
  • Starbucks at the Safeway
  • Corridor Coffee
  • Pattiserie Poupon
  • Via Umbria
  • Boulangerie Christophe
  • Wawa
  • Saxby’s
  • Cafe Georgetown
  • Peete’s Coffee
  • Blue Bottle Coffee
  • Bluestone Lane
  • Grace St. Coffee
  • Dog Tag Bakery
  • Paul
  • Dean and Deluca
  • Baked & Wired
  • Pain Quotidian

And that’s not even counting the multiple locations on Georgetown’s campus like yet another Starbucks and Uncommon Grounds.

Suffice it to say, that despite this large number of coffee shops, each one of these is reliably busy at peak hours. Like a Los Angeles 10 lane highway, insanely large capacity hasn’t satisfied demand. It has only created more of it.

While this is somewhat tongue-in-cheek for GM, people have really looked at this phenomenon! For instance, many people credit the omnipresence of Starbucks with the creation of demand for more non-Starbucks coffee shops. And Georgetown would fit that bill, with our five plus Starbucks and large non-Starbucks market.

So, welcome Compass Coffee. You probably won’t be the last.

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1 Comment

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One response to “The Induced Demand for Coffee Shops

  1. The Rapha Store on Grace Street has a coffee bar as well; unbelievably it’s on the same block as Dog Tag and Grace St. Coffee!

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