Coffee Shops Diversify As Traffic Slows

The Wall Street Journal: “Consumers are visiting traditional coffee shops less often when there are a plethora of cheaper options. Everyone from McDonald’s Corp. to gas stations is hawking specialty coffee. Even grocery stores are expanding the space devoted to bottled and canned coffee drinks, which Mintel says poses a threat to coffee shops. Traffic growth to large coffee chains such as Starbucks is slowing, while traffic to small coffee chains and independent shops is declining, according to NPD Group Inc.”

“The troubles facing the coffee business are similar to those plaguing the broader food-retail and restaurant industries, which have an oversupply of retail space that are competing against a proliferation of new food options. In addition, coffee shop visits are less frequent with people curtailing mall shopping and as they work from home or spend more time in their offices during the workday.”

“Caleb Bryant, senior food service analyst at Mintel, said that sales growth for many coffee chains or shops will have to come from an existing base of coffee drinkers shelling out more money for evermore complicated and expensive drinks. Starbucks and Dunkin’ are appealing to more affluent consumers who can pay more for specialty drinks like nitrogen-infused cold brew and vanilla chai … Stumptown, Blue Bottle and Intelligentsia are offering subscription services, selling their beans to hotels and restaurants and getting packaged products into grocery stores as a way to supplement their cafe business.”

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