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Walking around Seattle I’ve been troubled by the sheer number of coffee shops I’ve seen. They’re everywhere. Yesterday I stopped in a Starbucks and got a coffee, started down the street, turned the corner and saw another Starbucks. Within the next 10-15 minutes of walking I saw 3 more Starbucks. I guess that wouldn’t be so troubling if I wasn’t also seeing several “Seattle’s Best” and “Tullys” coffee shops, not to mention all the small mom & pop coffee shops. It’s bizzarre. None of these places seemed to be hurting for business—there were always people sitting around sipping “lattes” and double shot “cafe americanos.”

Now, the really shocking thing about tremendous availability of coffee is that it doesn’t seem to be driving the price down. For instance, a tall (which is the Starbuck’s name for small) still costs $1.30. One would think that all the competition would have driven the price down to something on the order of $.20 or $.30 but it hasn’t. The prices are pretty much the same wherever you go. Wouldn’t the law of supply and demand dictate otherwise?

It has me worried about the Seattle economy. There might be a few different explanations for the steady coffee pricing structure.

1. There is tremendous demand for coffee in Seattle. This might be possible. The cold dreary weather might cause people to drink inordinate amounts of the hot beverage. If this were the case, though, I would expect to see more restrooms and that doesn’t seem to be the case.
2. A powerful coffee cartel is controling coffee pricing structure in Seattle. Even with such an explanation, the sheer number of coffee shops defies reason.

1. The operation of coffee shops is part of a pyramid scheme on an order of magnitude greater than that which brought the Albanian economy to its knees. This explanation is the one I am currently favoring. The only way I can see this many coffee shops making any money is if the owners are looking for other people to open their own coffee shops. It really is the only thing that makes sense.

   Option 1 makes me fear for renal failure of the entire city. While options 2 and 3 make me wonder if Seattle won’t soon be facing a protracted SEC investigation.

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