SBUX Starbucks Corporation

By Charles Passy 

Talk about close competition.

On Seventh Avenue near West 23rd Street, a Dunkin' Donuts is set to open next-door to fellow coffee purveyor Starbucks, a side-by-side setup so rare that Grant Benson, vice president of global franchising for Massachusetts-based Dunkin' Brands, said he wasn't aware of it ever happening before in New York City. Starbucks didn't respond to a request for comment.

The Center for an Urban Future, a think tank that tracks the spread of chains in New York City, also believes it to be a first.

"It was only a matter of time," said Jonathan Bowles, its executive director, noting that the two chains have nearly 900 locations in the city.

The coffee collision in the heart of Manhattan's busy Chelsea neighborhood reflects a growing reality in New York, where some chains are expanding rapidly and independent retailers are shutting down.

According to the Center for an Urban Future, Dunkin' Donuts, the largest chain in the city based on number of locations, has added more than 100 local stores over the last five years, bringing the current figure to 568, while Starbucks has added more than 40 during the same period, bringing its total to 307.

Which isn't to say that every local resident is pleased. "I'm tired of the chain stores," said Debra Corwin, 64 years old, a psychotherapist who lives in Chelsea.

Restaurant-industry experts say that, perhaps surprisingly, the proximity may not harm either coffee shop, since each has loyal customers who won't jump ship.

Bret Thorn, a senior editor at trade publication Nation's Restaurant News, said that Starbucks fans tend to be drawn to a bolder-flavored brew and are more likely to linger over a cup in the store, while Dunkin' customers are more about speed and convenience.

Such distinctions appeared to be accurate, based on a sampling of customers leaving the Starbucks in Chelsea.

"Starbucks just has better coffee," said Andrew Robson, 37, an entrepreneur who works nearby.

Dunkin' Donuts also has its fans. A Starbucks loyalist who declined to provide his name admitted that he might be tempted to make two stops: Starbucks for java, Dunkin', once it opens, for its namesake baked good.

"But I eat doughnuts only once a year," he added.

Write to Charles Passy at cpassy@wsj.com

(END) Dow Jones Newswires

March 25, 2016 11:12 ET (15:12 GMT)

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