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.
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.
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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.