What’s next for coffee stocks as US economy continues to reopen?
- Coffee shops including Starbucks continue to show impressive rebounds in foot traffic.
- According to Placer.ai, Dunkin' Donuts completed its recovery from 2019 levels.
- The situation for Starbucks 'might get even better,' the analytics firm notes.
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People have had enough of having coffee at home, according to a new report from foot traffic analytics firm Placer.ai.
Starbucks at peak COVID-19 performance
As Americans continue to get vaccinated, governments at all levels are easing COVID-19 restrictions and this could represent a catalyst for coffee chains like Starbucks Corporation (NASDAQ: SBUX), according to Placer.ai. In fact, visits to the iconic coffee chain were down just 3.1% in June compared to June 2019. Privately-owned Dunkin’ Donuts has seen positive foot traffic in April, May, and June 2021 compared to the same period in 2019.
The rebound in traffic can be attributed to regular work and school routines. As more people return to the offices and in-class learning, their traditional morning cup of coffee or breakfast visits have resumed. According to Placer.ai, visits between 6 AM and 9 AM accounted for 9.9% of all visits in June 2019 and last month showed a near-complete recovery at 9.3% last month.
Placer.ai’s Ethan Chernofsky commented:
The takeaway is that normal patterns are returning and repeat visits and visit durations are on the rise, all of which is fueling a powerful recovery.
Can recent trends sustain?
Consumers have become more comfortable spending extra time at coffee stores in recent weeks. Median visit duration in June was down 14.7% compared to two years ago. Last year in June, the median visit duration was down 20.6% from June 2019. Encouragingly, the analytics firm is finding that customers are also making repeat visits to their go-to coffee shops.
Placer.ai states that the “situation might get even better” as weekly visits to Starbucks showed the strongest comparative weekly metrics for the weeks beginning June 28 and July 5 since the start of the pandemic. Encouragingly, California and New York, perhaps the two largest markets for Starbucks, are lagging behind other states in the nationwide recovery standard. Chernofsky notes:
As these areas continue to recover, expect brands like Starbucks to see an even greater boost in visit rates.