Los Angeles, CA (PRWEB) July 24, 2013

The Coffee and Snack Shops industry experienced a major slowdown in 2009 due to a struggling economy and, to a lesser extent, changing consumer tastes, despite surging during the past decade. In the five years to 2013, IBISWorld estimates revenue will grow at an average annual rate of 0.9% to $ 29.0 billion. After revenue declined 6.6% to $ 25.9 billion in 2009, it resumed its upward climb in 2010. In 2013, industry revenue is expected to continue its rebound with an increase of 2.6%, IBISWorld industry analyst Andy Brennan says.

During the recession, consumers spent less on luxuries like eating out and many chose to purchase low-price items when they did spend. This caused high-priced coffee drinks and other nonessential snacks to lose the battle for consumers’ shrinking budgets, Brennan says. Consumers have also become increasingly health conscious during the five years to 2013. Many retailers, such as Jamba Juice, have expanded their healthful options in response to this trend; consequently, these companies have grown. Still, the general trend toward healthful eating has hurt the Coffee and Snack Shops industry’s unhealthier segments, such as donut and ice cream shops. Furthermore, in response to weak market conditions, the number of establishments is expected to increase more slowly than in the past, at an annualized rate of 1.6% to 55,428 in the five years to 2013.

IBISWorld estimates that in 2013, the top four players in this industry include Starbucks Corporation, Dunkin’ Brands Inc., Krispy Kreme Doughnut Corporation and Einstein Noah Restaurant Group, providing this industry with a medium level of concentration. Starbucks and Dunkin’ Brands make up more than one-half of the industrys market share, giving them considerable market power in determining industry trends and creating a formidable barrier for nonfranchised players.

To combat slumping sales major operators like Starbucks and Dunkin’ Donuts are expected to expand their menus during the five years to 2018, which includes increasing their offerings of nontraditional, high-margin menu items like iced coffee drinks, breakfast items and wraps. These additions are expected to help these companies gain higher revenue and profit. Many major chains are also expected to invest more in international growth as part of a long-term strategy because many larger players view China, in particular, as a market with huge potential for growth and long-term profitability. In the five years to 2018, revenue is forecast to grow. For more information, visit IBISWorlds Coffee and Snack Shops in the US industry report page.

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IBISWorld industry Report Key Topics

This industry is composed of establishments that prepare or serve specialty snacks and nonalcoholic beverages including ice cream, frozen yogurt, cookies, donuts, bagels, coffee, juices, smoothies and sodas. Purchases may be consumed on-site, taken to go or delivered.

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Recognized as the nations most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.