U.S. branded coffee shops will only return to pre-pandemic sales levels next year after the COVID-19 pandemic wiped out nearly a quarter of their turnover last year, according to Allegra World Coffee Portal, a research and consultancy firm.
The firm estimates sales at U.S. branded coffee shops, which include household names like Starbucks, JDE Peet’s and Dunkin’ Brands, fell 24% last year to $36 billion, and will only grow to $40 billion this year, below 2019 levels.
It says 208 out of a total of 37,189 branded coffee stores closed shop permanently in 2020, equivalent to 0.6% of the market.
“The U.S. coffee shop market is enduring the worst trading environment in living memory. However, with a changing political situation, mass vaccinations and operators rapidly adapting with new trading formats, there is light at the end of the tunnel,” said Allegra Group CEO Jeffrey Young.
“We expect trading to begin stabilizing from summer 2021, however it will take a number of years for operators to fully readjust to the ‘new normal’,” he added.