A  study of 4700 Melbourne coffee shops opening and closing patterns over 20 years finds that chains do not drive independents out of business. A learned reader points CMM to research by Joshua Gans, (UniToronto ex, UniMelbourne), Richard Hayes (ACCC) and US colleagues Brian Adams and Ryan Lampe which concludes, “chain stores have no discernible effect on the exit or entry decisions of independent stores.” However, chain branches and independent outlets do push competitors of their own type out of business.

“These findings imply that independents and chains operate almost as though they are in separate markets.” Yes, the former sell coffee and the latter are in the hot flavoured water business.