There is already a Costa next to the Card Factory in the corner of Meole Brace Retail Park, which would have been removed if plans were accepted, as well as one inside the Next store.
The application was for a new 205sqm Costa between McDonald's and Pizza Hut, which would sit on a grass verge and part of Pizza Hut's car park.
But members of Shropshire Council's central planning committee unanimously refused the application yesterday, despite an officer's recommendation for it to be approved.
Councillor Ted Clarke, for Bayston Hill, Column and Sutton, voiced concerns about the application, and said "enough is enough".
He said: "I feel I need to voice concerns as it is yet another application within the already congested retail park.
"This establishment would increase the number of car journeys on an already busy roundabout.
"Almost on a yearly basis we're getting further applications on the same retail park with all sorts of assurances to ensure the traffic isn't impacted, but to date nothing has been done.
"I think we've got to a point where we have to say enough is enough.
"We've got to get improvements within the retail park and outside."
Councillor Alex Phillips, for Bagley, added: "There's almost a gun being held to the committee's head saying they will make improvements if the application is approved. They should be doing it now."
Councillor Pam Moseley, for Monkmoor, said there needs to be a "proper look at ways in and out of the retail park".
No suitable site in town centre
Agent Hollie Barton said there was not a suitable site in the town centre for the development.
"It's been agreed it can't be located in the town centre," she said.
"We are aware of the concerns but a coffee pod will have no considerable affect on traffic.
"We've proposed three improvements to the access which will be delivered as part of this application.
"The proposal will create jobs in Shrewsbury."
The news comes after controversial plans for a new Sports Direct building were approved in February.
The bargain sports shop is moving from its current position in between Argos and Next to a new 2,787sq m building between TK Maxx and Argos.
Objections were voiced from residents and business owners about the increase in traffic, access not being sufficient for existing units, traffic queues to get in and out, and existing car park and estate roads being in poor condition.
Three new retail units have been built on the northern end of the site in recent years and are currently occupied by Costa, Card Factory, and Carphone Warehouse.
A Marks & Spencer food hall was also built on the western side.