Coffee & Snack Shops in the US Industry Report

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Coee & Snack Shops in the US July 2013

Industry Performance

Key External Drivers continued

other snack shops experience revenue growth. Per capita coffee consumption is expected to decrease slowly in 2013, posing a potential threat to the industry. Consumer Conidence Index Consumer sentiment measures consumer’s perceptions about their current and future nancial prospects.

Changes in consumer sentiment have a signicant effect on the spending of  discretionary items, including items from snack and coffee shops. During a recession, consumers tend to forego higher-margin items and opt for lowerpriced value products. The consumer sentiment index is expected to increase in 2013. Healthy eating index

Consumer spending 4

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SOURCE: WWW.IBISWORLD.COM

Current Perormance

The Coffee and Snack Shops industry  has been a victim of the weakened economy, the rapid rise in unemployment and, to a lesser extent, society’s rising awareness of the health risks associated with diets high in fat, salt and sugar in the ve years to 2013. Despite these obstacles, the industry has responded to changes in consumer

preferences, which has helped revenue grow. In the ve years to 2013, revenue is expected to increase at an average annual rate of 0.9%. In 2009, industry  revenue declined 6.6% to $25.9 billion,  but since 2010, the industry’s revenue growth has been positive. In 2013, industry revenue is expected to rise another 2.6% to $29.0 billion.

Cutting back

 As the economy fell into a recession and unemployment numbers rose, consumers became more selective  when spending their disposable incomes. For example, in 2009, consumer spending declined 1.9%, and luxuries such as eating out and a morning cup of coffee at Starbucks  were among the rst expenditures to

go. Some consumers cut out coffee and snack shops from their budgets entirely, opting to eat in to save money. This trend reversed as consumer condence improved; consumer spending is expected to grow at an annualized rate of 1.3% over the ve  years to 2013. With consumer spending on track to rise an additional 2.1% in

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