Market Research Report
|Published by||Global Industry Analysts, Inc.||Product code||914487|
|Published||Content info||389 Pages
Delivery time: 1-2 business days
|Published: April 1, 2021||Content info: 389 Pages||
Coffee Shops Market Licks Its Wounds as COVID-19 Brings Socialization to an Abrupt Halt. Growth Plummets by -15.5%
The global market for Coffee Shops is expected to slump by -15.5% in the year 2020 highlighting a US$28.7 billion erosion in market value. Thereafter the market is expected to recover and reach US$201.3 billion by the year 2027 trailing a post-COVID-19 CAGR of 3.6% over the analysis period 2020 to 2027. Man by nature is a social animal and the pandemic is changing it all with forced social distancing impacting communal togetherness. Coffee shops which are popular for their cozy hangout environment perfect as public social places for conversation & bonding are today deserted. A cheerful environment for socializing with friends & family & an icon of urban neighborhoods, coffee shops are today seen as hot spots for disease contagion. Shutdown for months as part of lockdown measures has sent several coffee shop operators into losses. Lockdowns and other restrictions coerced a large number of coffee shops to temporarily shut down various venues thus indicating the disappearance of cafe culture for most part of the year. The scenario prompted various shops to adopt new trading models such as takeaway only, reduced trading hours, limited options on menu and cashless payments. Even as the food service industry re-opens, fear of spreading infections is resulting in low customer footfall. Social distancing measures and hygiene requirements have forced most stores to limit seating to keep customers at a distance, which means that most stores are operating at half capacity, or less. With a slow and bumpy road to recovery, coffee shop revenues will slump in the year 2020.
The decline in consumer demand and spending during the pandemic are prompting coffee shops implement various strategies and measures to drive revenues. Coffee shops engaged in the takeaway coffee business are sticking to social distancing measures to mitigate consumer concerns. Various shops have shifted away from credit cards and cash and opting for contactless payment options like virtual payment along with installing glass barriers for preventing contact between customers and employees. Several coffee shops are leveraging social media platforms for staying connected to customers and maintaining demand. These shops are offering tutorial videos about brewing at home along with information on different types of specialty coffee. In addition, various coffee shop owners have started offering products other than coffee, such as gift vouchers or brewing equipment at reasonable price points. These strategies are anticipated to help coffee shop businesses in surviving the tough and highly uncertain phase. With more consumers taking control of ordering experience and growing appetite for contactless, convenient ordering, coffee shops are poised to adapt quickly. Various coffee chains are focusing on makeshift drive-thru lanes along with walk-up windows and curbside pick-up for serving customers. Leading chains such as Starbucks are making various operational changes such as entryway pickup to help customers pick up coffee without entering into the store. These stores are betting on apps for ensuring contactless ordering. Home-delivery of specialty coffee is also gaining interest and promises to provide hope for coffee shops and chains with online presence.
In the post COVID-19 period, the recovery in travel and tourism will bring back the lost popularity of coffeehouses. Coffee is the second most popular beverage after water. Not surprisingly coffee performs a very important social function and plays a vital role in building social relationships. Since coffee consumption transcends geographic and cultural boundaries, it widely considered as a social lubricant helping people bond, communicate, build relationships and enjoy. Given the pleasurable experience of coffee consumption, coffee shops have become social places for people to handout, talk, write, read, and study. It provides a cozy intimate living room atmosphere for causal customers reading a book; a connected environment with free-Wi-Fi for busy customers on a laptop; a cheerful environment for socializing friends; offers a romantic environment for dating couples. Coffee shops have therefore become icons of urban neighborhoods. They create vibrant streetscapes and produce huge pedestrian activity. They have high customer footfall and are highly profitable. They play an important role in community development by encouraging increased social activity. Urbanization of leisure resulting from lifestyles centered around work and offices has created a need for leisure environment as an alternative to leisure in the streets. Sophisticated, clean, classy, easily accessible and respectable leisure environments began to grow in demand offering the perfect conditions for the rise of coffee shops. Over the decades, rapid urbanization, creation and development of new urban centers have helped boost the coffeehouse culture. Mushrooming of boutique coffee shops have become a trademark of virtually every city neighborhood. The pandemic is not seen as likely to change the rich social heritage & role of coffee. In the coming years, coffee shops will enjoy a return to profitability not only due to the robust coffee culture but also due to the effervescent innovation in coffee types offered. Cafe Latte, Caffe Americano, Cappuccino, Espresso, Flat White, Long Black, Macchiato, Mochaccino, Irish Coffee, Vienna, Affogato are among the numerous other flavors and varieties of coffee offered in coffee shops across the world. Coffee is the only beverage that emulates different traditions and cultures of countries worldwide, from Cafe Cubano in Cuba, Yuanyang from Hong Kong, Vietnamese "Ca PheSua Da", Greek Frappe, Turkish coffee to Italian macchiato.
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