In Merced, local coffee shops brew relaxed vibes and community over chain stores

Community connections and a laid back atmosphere is something Merced coffee shop owners say their cafes offer that national coffee chains can’t match.

However, when it comes to competing with drive-thru coffee locations, especially large chain locations such as a Starbucks, local coffee shops struggle to keep up with the convenience of grab and go. Elizabeth Moreno, owner of Hola Cafecito in Merced, said that while she understands the convenience and accessibility of larger coffee chains, choosing that over a local coffee shop does hurt business.

“It does hurt us,” said Moreno. “Especially being in downtown, a lot of people really complain “ ‘well there’s no parking,’ ” she said. “You know, that’s just the nature of any downtown, you’re not going to find a whole lot of parking, but that’s just in any downtown.”

While Hola Cafecito offers mobile ordering, she said it is still difficult to compete with larger drive-thru coffee chains.

“We have mobile ordering, but we can’t take it to your car because we don’t have that two minute, or 10 minute parking space for our customers,” she said. “I wish we had that.”

She said it’s that accessibility that makes it difficult for small businesses to compete with the larger chains.

Educating customers on their menu is another challenge when competing with larger coffee chains offering a wide range of beverages.

Moreno said her business sees a lot of customers come in expecting to get the same drink they get from places like a Starbucks. This leads to her business having to explain to customers they have different offerings such as sizing options and milk alternatives, than what customers would usually find at a place like a Starbucks. A macchiato at Starbucks differs from a macchiato at a locally owned shop.

Moreno said a traditional macchiato consists of a double shot of espresso with a small dollop of steamed foam.. When customers go to a specialty coffee shop, they may encounter a scenario where the coffee shop doesn’t offer that drink or isn’t able to make it, due to the fact that they offer what is seen as a traditional macchiato.

But that doesn’t mean she hasn’t made changes or tweaks to compete with the larger coffee chains. For instance, Moreno said they have added a caramel macchiato to what she referred to as their “secret menu.” She said that when people come in, the baristas still mention how the macchiato they offer is a traditional one, but if a customer really wants a caramel iced macchiato, baristas at both the Merced and Hanford locations are able to make a similar beverage.

“I think once we educate people and let them know we don’t have this, but we can make something similar. And once they try our coffee, they either fall in love and keep coming, or they stick to what they know,” said Moreno. “And that’s okay too. I think the right type of customers come in and they keep us busy.”

Melissa Eisner, owner of Coffee Bandits in Merced, said she feels nine Starbucks in the city does seem like a lot. And like Moreno, Eisner said she too has noticed some customers expect a product similar to one made at a large coffee chain. She said she has noticed some Coffee Bandits customers expect the drinks to be much sweeter and made at a quicker pace.

“We’re kind of more of a come in and chat with your barista and meet some people kind of coffee shop,” Eisner said. “It seems like maybe they’re a little more impatient. So I feel like maybe it changes some of the cultural expectations around coffee.”

Eisner echoed a similar viewpoint about the differences in locally owned coffee shop offerings compared to large chain locations. While Coffee Bandits offers a chia drink made in house, Eisner said it is seems to be spicier and more pungent compared to a chai drink customers order from a larger chain such as Starbucks. There, she said the chai drinks seem to be sweeter, milkier and lighter.

“We have to kind of like gauge wether or not the person who is ordering is looking for this Starbucks style drink–which we can accommodate by adding a lot more sugar and maybe not adding as much of the chai itself,” said Eisner. “We can make ours tase like the Starbucks style, this is true for a lot of other drinks too.”

Moreno said it can be intimidating, not just for coffee shops, but for any small business when trying to compete with the larger national chains.

“Because you think that you have to change everything that you’re selling to target those customers,” said Moreno. “But to be honest, we try to stay true to ourselves. We know that the right customers will come here and they’ll appreciate the offerings that we have.”

While changes have been minimal, Jimmy Eisner, manager at Coffee Bandits, said the location did start offering cold foam for beverages this past summer.

“People are always asking for that,” said Jimmy Eisner. “And matcha, we started carrying matcha.”

Melissa Eisner said the times she has attempted to employ cost cutting measures, the baristas have pushed back telling her that the product was not as good.

Eisner said that she notices a slight decrease in customers when a new coffee chain location opens in the city. This is something that she said is usually temporary while people try something new.

“We usually see a temporary dip in sales every time any coffee related place opens up, but it usually evens out,” Eisner said.

Both Moreno and Eisner said the majority of their customers tend to include local residents, students and even tourists, due to the city’s location in proximity to Yosemite National Park. Moreno said her business also tends to see many working professionals in the downtown area, as well as people in the medical field and law enforcement.

Moreno said one way her business differs from large chain locations, is their weekend meals. Offering chilaquiles on Fridays, Saturdays and Sundays, Moreno said her business sees a lot of families on the weekend. Including people stopping by after church or visiting from out of town.

“So we don’t just offer coffee,” said Moreno. “I think what makes us different is that we offer breakfast, a light lunch and just a place to, you know, feel comfortable and bring your family. I think we’re definitely welcoming.”

Eisner said that while Coffee Bandits may not operate at the fast pace that larger coffee chains do, her business offers a connection to the community. This is done through the display of local artwork, books and crafts in and environment built by the community.

“Our atmosphere is distinctly Merced,” said Eisner.

With popular beverages such as pumpkin spice drinks, Eisner stressed that their offering is made from real pumpkins and vanilla. The coffee shop also features syrups made in-house as well as rotating seasonal specialties and vegan options.

After having kept prices the same for the past two years at both the Hanford and Merced Hola Cafecito locations, Moreno said the decision has been made to slightly increase pricing due to higher operating costs. She said the business has also had to get creative when it comes to sourcing products from vendors.

Making the decision to offer one size of beverage has also helped with costs.

“So we’ve just had to get creative with those type of things. And it’s helped. Definitely helped,” she said.

That said, Moreno feels that her business continues to see the clientele that are there to support it.

“I think it’s worth it to spend the extra time and the extra money to keep these doors open for any local coffee shop or and, you know, any tea shop.”

ASIP Sensory Lab customer and Merced resident Gabby Acosta, 25, said she personally feels there are too many Starbucks locations and that she prefers to frequent locally owned businesses rather than chain stores. While waiting on a beverage at the sensory lab, she said she finds locally owned businesses tend to hold fun events and she enjoys the chill, laid back atmosphere and ambiance they offer.

She said it is that atmosphere at locally owned coffee shops which leads to her and her boyfriend choosing to patronize them so that he can easily study and she feels she can relax and do her own thing.

When it comes to larger coffee chains such as Starbucks, Acosta said she views those as more of an on-the-go type coffee spot where in her experience, they seem to want customers to get in and get out. She said that while she will patron Starbucks locations, she primarily does so while she is out in the field and having to drive throughout the county for her job. But for times when she is on her lunch break or just wants to take it easy, she opts for a local coffee shop or the EM-Tea teahouse.

“For me, I like locally owned businesses,” said Acosta. “It feels more personable. It’s like, very community oriented and I think that’s something that Merced is like, slowly starting to grow out. Merced needs more locally owned businesses in general.”

Starbucks Café to open inside of Merced Raley’s

A new Starbucks Cafe is set to open inside the Merced Raley’s this month, according to the Levi Wingo, senior vice president of Product and Merchandising Innovation at the Raley’s Companies.

The new cafe is scheduled to open on Sept. 23 in the 3550 G St. location, replacing the Peet’s Coffee location that was previously featured inside the grocery store.

Wingo said eight baristas have been hired to staff the cafe and are currently undergoing training for their positions. Among those hired for the new cafe, is a former Raley’s team member who has been promoted to team leader at the Starbucks location. The company said the team leader will bring valuable experience to the position as a former Starbucks assistant team leader.

The company said it is excited about the new Starbucks café that will offer seasonal coffee and tea as well as food items.

This story was originally published September 29, 2025 at 5:00 AM.