Dive Brief:
- A majority (58%) of consumers plan to visit a cafe over the Thanksgiving holiday, according to a Morning Consult survey commissioned by Starbucks, highlighting a significant holiday traffic opportunity for coffee chains.
- The coffeehouse is a popular destination for Gen Z survey respondents in particular, with 70% saying they plan a cafe visit and only 33% anticipating a stop at a bar or pub over the holiday weekend.
- Younger consumers — both Gen Z and millennials — report a strong attachment to on-premise, coffeehouse experiences. Forty-seven percent of Gen Z respondents say they’re planning an on-premise coffee occasion, with a larger, but unspecified, number of millennials making the same choice.
Dive Insight:
Starbucks has spent the past year working to make its on-premise experience more enticing for consumers through the return of the condiments bar, more comfortable seating and the addition of ceramic mugs for in-store orders. The chain also came up with a new redesign that it intends to roll out across 1,000 stores, at a cost of $150,000 per location, to give its locations more of a coffeehouse feel.
Meredith Sandland, the company’s executive vice president and chief coffeehouse design and development officer, said the survey results indicated the brand was moving with the tide of consumer sentiment.
“Thanksgiving is for reconnecting with family and friends, whether that’s young adults going home to reconnect with friends from high school or going shopping and connecting over a mocha with your mother,” Sandland said. Starbucks said Gen Z consumers in particular crave social connection and that its cafes can be a place to give them that social environment.
Starbucks’ emphasis on its on-premise experience may also be a way to insulate it from competition from 7 Brew and Dutch Bros, two fast-growing, small-footprint coffee chains that are heavily focused on drive-thru throughput. The cafe, or third place vibe, cannot be meaningfully replicated in a unit that has no dining room.
Younger consumers’ relative preference for cafes over bars on a holiday weekend could also indicate an opportunity for beverage concepts to take share from liquor establishments. Health-conscious consumers, per a recent National Restaurant Association report, continue to shift spend toward premium, non-alcoholic beverages and occasions.
Starbucks, which ended a run of negative same-store sales growth last quarter, has been working hard to convert changes made under CEO Brian Niccol into a durable renewal of traffic.
The brand’s recent holiday launch, which included a limited supply of Bearista cups and its yearly reusable Red Cup launch, was its most successful sales day in North America ever, executives said.
