Americans love going to coffee shops

Starbucks and other big chains are seeing astounding growth. Unlike burgers and pizza, coffee is a daily ritual for many people.

By MSN Money Partner Mar 28, 2014 1:14PM
Image: Coffee Woman (© Bloomimage/Corbis)By Venessa Wong, Businessweek

If you've tracked how much money you spent at coffee shops in the past few years, there's a good chance it has gone up. 


The trend is reflected in rising same-store sales at Starbucks (SBUX) (8 percent in 2013) and Dunkin' Donuts (DNKN) (3.4 percent). 


Even if you prefer a boutique coffee shop, it's hard to deny that the "cafe scene" --particularly in corporate incarnations -- is thriving in the U.S.


In fact, sales data from restaurant consultancy Technomic show cafes are the quickest-growing segment in the fast-food sector, with sales up 9 percent last year. Unlike other kinds of food, coffee has the advantage of being a daily ritual for many people. 


"Cafes continue, in quick service, to provide strong beverage and food options to younger consumers," said Darren Tristano, an executive vice president at Technomic, in an e-mail. This includes both cafes that focus on beverages and cafe-style bakeries such as Au Bon Pain.


The boom is being driven by large chains. Of the country's roughly 26,500 cafes, Starbucks accounts for more than 11,400 of them, Dunkin' more than 7,600 more, and both are expanding. 


Only about 5,000 cafes in the U.S. are now run by independent operators and small chains, defined as businesses with 30 or fewer units, according to Technomic. While independent coffee shops are doing well -- sales increased 6 percent last year -- small chains saw sales drop 5.5 percent, according to the data.


Additional genres of fast food marking similarly robust growth are Asian- and noodle-focused chains and purveyors of Mexican cuisine, both of which have benefited from a growing consumer preference for slightly nicer fast-casual restaurants. Larger, more established categories such as pizza and burgers experienced slower growth, thanks in no small part to cafes and noodle joints stealing share "from more traditional players," said Tristano.


Here's how the different kinds of limited-service restaurants performed in 2013, according to year-on-year sales data from Technomic (with leading chains cited as examples):


1. Cafes (Starbucks, Dunkin' Donuts) +9 percent
2. Bakery Cafes (Au Bon Pain) +9 percent
3. Asian/Noodles (Panda Express, Noodles & Co. (NDLS), Manchu Wok) +8.5 percent
4. Mexican (Chipotle (CMG), Taco Bell (YUM)) +6.1 percent
5. Chicken (KFC, Boston Market) +4 percent
6. Sandwich (Arby's (WEN), Subway,) +4 percent
7. Frozen Desserts (Ben & Jerry's (UN), Baskin-Robbins) +3.6 percent
8. Pizza (Domino's (DPZ), Papa John's (PZZA) +2.3 percent
9. Burger (McDonald's (MCD), Burger King (BKW)) +1.5 percent
10. Family Casual (Golden Corral, Old Country Buffet) -5.5 percent


More from Businessweek


3Comments
Mar 28, 2014 3:42PM
avatar

That explains the high prices for a cup of joe at starbucks.

Mar 30, 2014 11:50AM
avatar
Buy a coffee shop near a university and you can retire in 2 years.
Mar 30, 2014 2:11PM
avatar

Youngsters...20-40 go to coffee shops to use wi-fi and spend little money..


Oldsters....60-80 go to coffee shops to shoot the breeze and spend little money..


Midsters....40-60 go to coffee shops to get coffee and Danish to go; AND SPEND MONEY..

If this group 40-60, QUIT going to coffee shops, they will GO OUT of business..

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