Member-only story
Number of the Day
The Unlikely Resilience of Coffee Shops, by the Numbers
Cafés are struggling, but they’re doing better than restaurants
129: That’s how many New York City coffee shops (out of a total of 3,890) have permanently shut down since March, according to data from Yelp, per the Wall Street Journal. Prior to the pandemic, the Journal notes that the number of coffee shops in the city increased by 29% over three years, an average of more than five new cafés a week.
The pandemic put a stop to that trend, but it appears that cafés are hanging on better than restaurants have. As we noted in a Marker Number of the Day last month, nearly 16,000 restaurants across the country have permanently shut down since March. (In New York City, the number of closed restaurants is estimated to be close to 1,000, according to Eater NY.)
Steve LeVine argued on Marker yesterday that some coffee shops are a part of the trillion-dollar economy built to serve the commuting white-collar office worker, which is at risk of collapsing if workers don’t return to the office soon (case in point: in its recent earnings call, Starbucks attributed the loss of some $2 billion year on year to deserted urban office corridors). And Max Ufberg wrote in GEN last month that cafés have lost their cultural status as places to gather or work. So why are establishments that serve coffee hanging on better than those that serve food?
Perhaps remote workers are more willing to tolerate their own cooking than they are a bitter home brew. A coffee shop’s resilience during this time depends on where it’s located, and whether it has prioritized price and convenience over having a comfortable space. While coffee shops in midtown Manhattan amid empty office buildings had seen their sales fall by 90%, those in residential areas were doing slightly better: typically earning a third of their pre-pandemic revenue, according to the Journal. And although Starbucks saw same-store sales fall 40% during its last quarter and plans to shutter 400 locations, it has also resumed plans to open new stores in dense neighborhoods and modify existing stores to be better suited for grab and go. Having an online business helps, too: Stumptown’s online sales went up by 250% in April, and Devocion has seen its online sales grow by 55% during the pandemic.
Turns out not even a pandemic can break America’s caffeine addiction.
