Ann Arbor's Espresso Royale to close Carpenter Road store on Nov. 3
An Ann Arbor-based coffee house chain will close one of its local stores next month as it plans to open another store in East Lansing.
Espresso Royale, based on South Main Street in Ann Arbor, is closing its Carpenter Road location due to low sales volumes.
"Unfortunately, that store is surrounded by a lot of aggressive competition," said Sarah Douglas, regional manager of Michigan stores for the chain. "It's a small location and it just didn’t attract enough customers."
The store's five employees have been offered transfers, and four accepted, Douglas said.
The potential closing was discussed over the past year, Douglas said, and the company decided to move forward this fall.
The chain - founded in Ann Arbor and still home to five other stores in the area - now operates 21 corporate stores in five states.
Douglas said it's still looking for expansion opportunities. Among them is the new store in East Lansing, which will open by mid-November.
"We're a real small company and trying to keep growing and moving," she said.
The company roasts its own coffee and makes its own baked goods, Douglas said.
It's also holding up well despite the economy, she added, thanks in part to a new pricing structures that emphasize deals like specials on lattes.
The competition is fueled by companies seeking market share from the large number of coffee drinkers in the U.S. According to data from the National Coffee Association, 17% of the adult population consumed a gourmet beverage on a daily basis in 2008 and 14% in 2007. And 54 percent of adults drink coffee beverages daily, according to early 2009 data, a level consistent with last year.
At the same time, more people are preparing their coffee at home, according to the NCA. Recent industry data also shows fewer people are drinking coffee in restaurants.
In the case of Espresso Royale, the Carpenter Road store started out strong when it opened about six years ago, Douglas said.
But then competition heated up. Now, within about a two-minute drive, there are three Starbucks - two with drive-throughs, Biggby Coffee, Dunkin' Donuts, Tim Horton's and three McDonald's, which has been pushing an expanded coffee menu at budget prices.
"Sometimes it’s hard for the little stores without a drive-through," Douglas said. "Our other stores are doing great."
Paula Gardner is Business Director at AnnArbor.com. She can be reached by email, (734) 623-2586 or on Twitter.
Comments
Paula Gardner
Mon, Nov 2, 2009 : 10:16 a.m.
Both Dunkin Donuts and Tim Hortons are near the Ellsworth/Hewitt intersection - southeast of this and close to I-94. They'd be more likely options for this store's customers who come from the east.
MR
Mon, Nov 2, 2009 : 9:23 a.m.
Where are the Dunkin' Donuts & Tim Horton's "within about 2-miles" of this ER?
Ron Torrella
Sun, Nov 1, 2009 : 10:14 p.m.
Aside from the aforementioned problems exiting that strip mall (left-hand turns are particularly technically demanding), that stretch of Carpenter Road has been in need of resurfacing for at least 5 years, maybe more. Most of the reason why I tend to favor Biggby Coffee up on Washtenaw is because I can get to it using side streets and I can either turn left using the light at Pittsfield Blvd or go down to Huron Parkway and turn right to head north. The service and the staff at the Carpenter Road ERC has always been polite and friendly. Sarah does a good job of finding the right folks to take care of the shop. It's sad to see the store close, but I'm sure Sarah will do just fine. And, no, Starbucks isn't going to be a fallback. I'll drive a bit farther to Biggby's. Starbucks' coffee tastes burnt (over-roasted) and I just don't feel comfortable in them. Too pretentious. And too expensive.
John Galt
Sat, Oct 31, 2009 : noon
The "aggressive competition" is probably McDonalds. They started offering flavored coffee at lower prices in the past year. The days of the $6 "latte" (the name you use to justify charging extra money for cofee products) are over. Especially in this economic environment.
Angela Smith
Fri, Oct 30, 2009 : 9:14 a.m.
I was just in yesterday for a $2 chia latte -- not something I could have grabbed at a drive thru starbucks! I also noticed the vacancy will be joining many others in that strip: Window World, Frame Factory, and Apartment Search. In my opinion the best reason to still go into Bell Arbor Commons: King Shing!
wuttha
Fri, Oct 30, 2009 : 9:02 a.m.
There was an Espresso Royale on Carpenter? No wonder it's going out of business.
Barb
Fri, Oct 30, 2009 : 8:38 a.m.
Bummer although I'm not surprised. That doesn't seem like a good retail location for a lot of places. (sipping from my Espresso Royale mug as I type)
81wolverine
Fri, Oct 30, 2009 : 7:59 a.m.
There's only so much coffee business to go around - even in Ann Arbor. I imagine the weak economy is part of the problem too. Since you can buy Starbucks coffee at Meijers, often on sale, more people are likely to make their own.