The pace of new coffee shop openings in the United States continues to slow, according to new research from Allegra World Coffee Portal.
The new report, released this week, showed another 37,274 coffee shops opened across the country during the past year at a 3.3% rate. That limited growth, however, represents the third consecutive year in which the growth rate has declined.
Starbucks and Dunkin’ dominated the new openings. Starbucks added 585 stores during the past 12 months while Dunkin’ opened another 309 outlets. Together, the two entities totaled 80% of the net new openings during the period, according to Allegra’s Project Café USA 2020 project.
Industry leaders consulted or surveyed for the study indicated specialty coffee and young consumers are powering the growth. Specialty coffee was considered “the most important consumer trend currently affecting the US coffee shop market,” a report summary provided by Allegra stated. Cold brew was identified as the fastest-growing product in coffee shops.
The trends were powered by under-30s consumers “who are more willing to try new products than older demographics,” the study stated. “This age group is also most likely to have significantly increased coffee shop visitation over the last 12 months, making them a key demographic for sales growth.”
Younger consumers willing to try new technology also supported the use of mobile apps and online ordering.
Overall, annual sales showed a 4.3% increase during the research period over the previous year.
“The US coffee shop market is at a critical crossroads, with rising costs and consumer expectations combined with intense pressure on end-consumer spend,” said Allegra c.e.o. Jeffrey Young. “Only the very best brands and sharpest operators will capitalize on growth opportunities in this current market landscape.”