If there are already 10 coffee shops on a street, what’s the point of you opening another one?
What new are you going to offer?
A better blend of coffee? Bigger muffins? A better location with more footfall? What about a more boutique cafe with some books to read?
It’s hard to be able to differentiate in a commoditised business segment. Unless you are a big player in your space(say Starbucks in this instance).
If you can avoid entering a commodity business, that’s great. If not, a good approach can be to blend the commodity as part of an experience your audience will cherish.
Lowering the price is rarely the right decision. Someone will always be ready to do it cheaper than you.