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Industry News

Competition leading to coffee-shop shakeout, experts say

November 7, 2017

With nearly 33,000 coffee shops, America may be getting a bit too much caffeine. Retail experts argue that specialist coffee chains are facing competition from those that sell java for less, according to The Wall Street Journal. Just about everyone is in the specialty coffee business these days, an article in the paper notes, including grocery stores, gas stations and fast-food restaurants. Accordingly, Dunkin’ Donuts recently announced that it would scale back shop openings, and last week Starbucks reduced its long-term projection for sales and profit.

Though the number of coffee shops is up by 16 percent from five years ago, that is projected to grow by only slightly more than 2 percent this year — its slowest rate in six years. And growth is likely to be even slower in future years, according to market research firm Mintel. Furthermore, the industry is ripe for consolidation as well, observers say, pointing to JAB Holding Co.’s acquisitions of Keurig Green Mountain and Peet’s Coffee.

By Edmund Mander

Director, Editor-In-Chief/SCT

Commerce + Communities Today

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