Coffee Is Seeing a Boom in Sales Despite High Grocery Prices

Higher grocery prices have caused many people to make difficult spending choices and tips have flattened out. But there’s one area where consumers are still showing up: coffee. 

And it all makes sense. Per the National Coffee Association, daily coffee consumption is at a 20-year high, up by nearly 40% since 2004 — driven mainly by consumers ages 25 and up. Possibly the result of little treat culture, even specialty coffee saw some growth, with 57% of Americans having had a specialty coffee drink in the past week, which is up by 7.5% year-over-year.

According to a report from Placer.ai, which tracks shopping and dining trends, coffee bars across the United States are enjoying an increase in visits. Overall, the visits to three major coffee chains, including Dutch Bros., Dunkin’, and Biggby Coffee, rose 5.1% during the first five months of 2024. 

The foot traffic increases were greatest in some less-populated states, such as Oklahoma, where they are up 19.4%; Wyoming, up 19.3%; and Arkansas, which has seen a 16.9% increase in visits.

But shops in some of the nation’s biggest markets have seen a rise in coffee drinkers. These include Texas (up 10.9%), Florida (up 4.2%), and New York (up 3.5%). Significantly, California has also seen a 4.2% increase in coffee customer visits, even though the business at some fast-food chains has suffered since the state implemented a higher minimum wage for their workers, and pushed to eliminate junk fees. 

The rise in coffee drinking comes even though Starbucks, by far the nation’s biggest coffee chain, saw a small decline in year-over-year visits. 

Placer.ai’s report said there are several reasons why visits to coffee places are increasing. For one thing, coffee chains are expanding with new shops. Dutch Bros., based in Grants Pass, Oregon, says it plans to add 150 to 165 locations this year, including its first shops on the East Coast. Biggby, which has focused until now on the Midwest, is aiming for new markets such as Boise, Memphis, Nashville, Atlanta, Charlotte, and Virginia Beach. 

“Major coffee players are leaning into growing demand by steadily increasing their footprints. By and large, they are doing so without significantly diluting visitation to existing stores,” the report said. 

In addition, the return-to-office trend has brought people back to coffee spots. Placer.ai says there have been steady increases in foot traffic as companies implement hybrid work schedules or require employees to work in offices once more. 

Placer.ai says that in some major markets, including New York and Miami, office visits are back to more than 80% of what they were pre-pandemic. The trend shows up clearly in Starbucks’ customer traffic. In April and May 2022, 18.6% of Starbucks visitors proceeded to their workplace immediately following their coffee stop. By 2024, this share shot up to 21.0%. 

Another trend: extremely short coffee stops. People have shifted away from getting their drinks and finding seats. At Starbucks, the percentage of early morning (7–10 a.m.) visits of less than 10 minutes increased significantly, from 64.3% in 2022 to 68.7% in 2024.

This short-stop trend also shows up at Dunkin’, although it varies by location. In Wisconsin, 50.9% of its visits between January and May 2024 lasted less than five minutes. But in Tennessee, Alabama, and Florida, very short visits accounted for less than 40% of its business.

Placer.ai theorizes that Dunkin’s success with very short visits may be driven by its app, which lets people place mobile orders, then zoom in or drive through to pick them up. That’s good news, since customers using the app also tend to generate bigger tickets. 

One advantage that these coffee places offer is an abundance of choices at multiple price points. You might think your venti Frappuccino is now too pricy, and you might be pinching pennies at Whole Foods. But you can downgrade to a brewed coffee or a double espresso and still get a buzz — and a treat.