Food & Bev

Coffee-shop foot traffic is strong, though consumer behaviors are changing: report

Dutch Bros. Coffee’s drive-thru success may be encroaching on leaders Dunkin’ and Starbucks.
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Francis Scialabba

· 3 min read

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Despite the dining category’s recent swings, consumers are still craving their coffee fix.

Following dips at the pandemic’s onset, coffee-shop foot traffic returned to pre-pandemic levels around April 2021 and has beaten 2019 levels since last May, according to a white paper by Placer.ai.

  • The coffee space notched notable two-year growth over 2019 in November (+8.4%) and December 2021 (+7.5%), compared to overall dining, which saw respective 6.4% and 1.8% declines.

Coffee break: While visits are back to pre-pandemic levels, some behaviors have changed. Consumers have shortened their time in coffee chains since Q2 2020, and have also shifted their visits to “late morning,” per Placer.ai. These shifts are both likely to persist, especially with later visits now accounting for 26.2% of all visits in Q4 of 2021.

With the emergence of new Covid variants, smaller players like Caribou Coffee and Peet’s have been more vulnerable to foot-traffic fluctuations, seeing a Yo2Y decrease in 2021’s second half, compared to 2019.

  • Meanwhile, Starbucks’ city cafés have recently seen significant growth, Placer.ai found, despite the company’s focus on its suburban footprint.

Brewing tensions: The classic East Coast–West Coast rivalry between Dunkin’ and Starbucks is heating up as they infringe on each other’s territory. Starbucks notched 30.5% Yo2Y foot-traffic growth in New York in Q4 2021, while Dunkin’ saw a 28.8% Yo2Y boost in California.

  • Dunkin’ has historically had “mixed success” in the Golden State, R.J. Hottovy, head of analytical research at Placer.ai, told Retail Brew, but its drive-thrus are giving it a boost.

These two have more competition than just each other: Oregon–based Dutch Bros. Coffee, which went public in September, has been a “standout story” with its own strong drive-thru business and peak-hour throughput, Hottovy noted.

  • As it grows its footprint in California, it’s seen 170% growth between January 2020 and December 2021. Plus, since Q2 2020, the percentage of Starbucks and Dunkin’ patrons who have visited Dutch Bros. is up ~2 points. Still, customer loyalty to the two main chains has yet to take a hit.
  • “What you are going to see is a lot of people trying to emulate what [Dutch Bros. has] done,” Hottovy noted.

Looking ahead…While the coffee category is returning to “a period of more stable growth,” Hottovy said, coffee shops must recognize changing behaviors and balance the grab-and-go nature of coffee chains with their sense of community.

“It really comes down to knowing who your customers are and formatting your locations to best satisfy those different consumer need states,” he said.—EC

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