Coffee shop foot traffic rebounding faster than restaurant visits
Yahoo Finance's Brooke DiPalma discusses how consumers are returning to coffee shops faster than they're returning to restaurants amid the coronavirus pandemic.
ALEXIS CHRISTOFOUROS: It looks like people prefer their cup of Joe from a professional barista. According to a new report from the Data Intelligence firm Placer.ai, the coffee space is actually rebounding faster than the dining sector. Brooke DiPalma here to break it all down in Brook's Bites. So what are some of the trends we're seeing with these coffee houses, Brooke?
BROOKE BIPALMA: Alexis, well, it turns out that more people are going outside of their house to get their morning Joe as opposed to brewing it up at home. According to this new report from Placer.ai, the coffee sector can be classified as, quote, unquote, "a proven necessity" based upon customers visits, even though during the pandemic, there was a lot of major shifts in work/life schedules.
For example, we're not commuting into work anymore. I'm not stopping by my local Starbucks at Astor Place. But foot traffic at the top 10 performing coffee giants did see a bit of a drop in early 2021. Now, as we made way into the last year, into the end of the year, coffee giants visits were up a whopping 7.5% in the end of December 2021. Now, that did surpass the dining sector by nearly double the foot traffic in November 2021.
Now, Placer.ai experts noted that this could mean that coffee at home just simply does not compare to the trip, the experience of going to a coffee shop. Now, another trend pointed out in this right here is the difference in time in which consumers are heading to their coffee shops, noting that a COVID-induced shift may be happening. Instead of going during those early, early hours in the morning-- I know we were going at 5:00 AM.
Now they're shifting towards getting their coffee later on after a bit of a start to their morning between 9:00 to 12:00. And that did come at the expense of going in the late afternoon and evening coffees. Now, because of those shifts, it does leave room for lots of innovation. Perhaps we're grabbing different items. So Placer.ai expect that this could lead to seeing different cravings among consumers.
KARINA CONTRERAS: Brooke, I've got to say, I'm not a coffee drinker. So it gives me more the jitters than a jolt. But the report also dove into trends of some other major coffee brands, including Starbucks, Dutch Brothers, and Dunkin'. What did you find there?
BROOKE BIPALMA: Karina, that's right. And I'm a tea drinker myself. But I have to admit, over the past few years, I have gotten into coffee. And many new consumers are seeing Dutch Bro as one of their new favorites. It seems to be giving Dunkin' and Starbucks a run for their money. Compared to 2019, the Oregon-based coffee chain saw a major spike in monthly visits, reaching as high as 160% in December.
Now, Karina and Alexis, all things into consideration, there has been a lot of growth for Dutch Bros. But it was a big year for Dutch Bros, this past year, it listed on the New York Stock Exchange in September. And over the past five years, it expanded its presence from 250 stores to 500 stores. So as expected, that it would be a lot more foot traffic into its locations.
Now, I do want to note that even though they are seeing explosive growth at Dutch Bros, it has not come at the expense of two coffee giants, Starbucks and Dunkin'. If we take a closer look at the month over month visits, in March of 2021, we saw a major spike from spring menus being released at Starbucks and Dunkin'.
And also worth noting, Starbucks still has that excitement around its fall pumpkin spice latte season. In addition to its red cup season that comes around in November and December. So it's seeing a boost of foot traffic there and also suggests that, despite all the noise, all the excitement, there's enough room for everyone in this game.
All national leaders can make way because coffee right now is apparently the big thing among consumers. It's always been considered the third place. And so now it's trending as that third place in a more work/hybrid model.
ALEXIS CHRISTOFOUROS: All right, sounds good. It definitely is an experience when you go out to get your coffee, also more expensive, we might add, than making the Java at home. All right, thanks for that roundup, Brooke DiPalma, in today's Brooke's Bites.