Piping hot: High consumer spending will increase revenue despite market saturation

The Coffee and Snack Shops industry has grown strongly over the past five years, driven by the expansion of major coffee retailers, such as Starbucks. Consumer spending in Canada, which has grown at an annualized rate of 2.5% over the five years to 2018, has also supported the industry's growth, as consumers have been more willing to splurge on small luxuries such as coffee and donuts. Modest growth in the overall economy, coupled with tepid consumer confidence and the economy's reliance on volatile commodity markets, is expected to limit discretionary spending in the coming years. Nevertheless, industry revenue is forecast to grow at an annualized rate of 3.1% to $5.7 billion over the five years to 2023...read more.

Industry Statistics & Market Size
Revenue
$5bn
Annual Growth 13-18
5.3%
Forecast Growth 18-23
Profit
Employment
69,168
Businesses
6,287
Market Share of Companies

Industry Threats & Opportunities

  • The breakfast segment has been a bright spot in an otherwise slow-growing food services sector
  • Operators are expected to experience many hurdles with regard to retaining consumer loyalty
  • The macroeconomic fundamentals that drive the industry’s growth are all expected to perform well
  • Industry Report - Industry Locations Chapter

    As a service-based industry that relies heavily on foot traffic and high levels of consumer spending to generate revenue, operators in the Coffee and Snack Shops industry are typically dispersed in line with population and income distribution. For instance, Ontario represents the most popular destination for coffee shops in Canada, accounting for an estimated 42.4% of all industry establishments and 38.7% of the total Canadian population in 2018. Similarly, Quebec is the second-largest province in Canada, both in terms of industry establishments and total population. In 2018, this region is estimated to contain 19.1% of all coffee and snack shop establishments, as well as an estimated 22.9% of the Canadian population. Add...purchase to read more.

    Additional Insights for the Coffee & Snack Shops Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Coffee & Snack Shops Industry are

  • Having a clear market position
  • Effective cost controls
  • Ability to franchise operations
  • IBISWorld analysts also discuss how external factors such as Consumer spending and Consumer Confidence Index in the Coffee & Snack Shops industry impact industry performance..

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    What's in this report

    What is the Coffee & Snack Shops Industry?

    This industry includes all establishments primarily engaged in preparing and serving specialty snacks and nonalcoholic beverages, including ice cream, frozen yogurt, cookies, donuts, bagels, coffee, juices, smoothies or sodas.

    Industry Products
  • Beverages
  • Food
  • Industry Activities
  • Operating coffee shops
  • Operating snack shops
  • Operating ice cream and soft-serve shops
  • Operating frozen yogurt shops
  • Operating donut shops
  • Operating bagel shops
  • Operating juice and smoothie shops
  • Operating cupcake shops
  • Operating cookie shops
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Consumer spending
  • Consumer Confidence Index
  • World price of coffee
  • Adult obesity rate

  • Current Performance
  • Large-scale coffee chains
  • Expedited service
  • Third wave coffee and potential hurdles
  • Wages and profit
  • Chart: Revenue Growth

  • Industry Outlook
  • Profitability
  • Competition to intensify
  • Table: Coffee & Snack Shops Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Coffee & Snack Shops Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Consumers in Canada

  • Key Selling Industries
  • Beef & Pork Wholesaling in Canada
  • Coffee & Tea Production in Canada
  • Dairy Wholesaling in Canada
  • Fish & Seafood Wholesaling in Canada
  • Frozen Food Wholesaling in Canada
  • Fruit & Vegetable Wholesaling in Canada

  • Products & Services
  • Beverages
  • Food
  • Other
  • Chart: Coffee & Snack Shops Industry Products and Services Segmentation

  • Demand Determinants
  • Income and expenditure
  • Demographics
  • Health consciousness
  • Convenience

  • Major Markets
  • Highest quintile of incomes
  • Fourth quintile of incomes
  • Middle quintile of incomes
  • Second quintile of incomes
  • Lowest quintile of incomes
  • Chart: Major Market Segmentation for the Coffee & Snack Shops Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    ProfitPurchasesWagesRent and utilitiesOther
  • Chart: Cost Structure Benchmarking – Sector vs Coffee & Snack Shops

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Coffee & Snack Shops Industry

  • Industry Globalization
    Starbucks Coffee Company,
  • Table: Starbucks Coffee Company - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Coffee & Snack Shops Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Coffee & Snack Shops Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)
  • Consumer spending (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Baby Boomers
  • The demographic of Americans born between 1946 and 1964.
  • Barista
  • A person who prepares and serves espresso-based coffee drinks.
  • Espresso
  • Coffee brewed by forcing a small amount of nearly boiling water under pressure through finely ground coffee beans.
  • Fair Trade
  • Coffee sourced from developing nations at reasonable prices, ensuring better wages and conditions for workers.
  • Foodservice
  • The practice or business of making, transporting, and serving or dispensing prepared foods outside the home.
  • Franchise
  • A store that uses a well-known firm's business model, including their trademark and goods, for a fee. This is an alternative to chain stores, which share a brand and a central management.
  • Point Of Sale (Pos)
  • A system used at checkout in retail stores using computers and cash registers to capture transaction data at the time and place of sale.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Coffee & Snack Shops market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Coffee & Snack Shops:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Coffee & Snack Shops market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Coffee & Snack Shops, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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