Coffee Shops Hint at the Geographical Patterns of Home Workers
Want to know how many businesses in a certain area are embracing telecommuting and a hybrid work model? The answer could be in the local coffee shop.
A report from the Bank of America Institute looks at the overall state of the coffee industry in the post-pandemic world. And while you might think remote workers are filling the shops for an occasional change of environment, the easier and faster it is to get a cup of Joe, the better the chances that people in that area aren’t going into the office.
"The logic is simple: people tend to grab a coffee during their morning commute and at other times during the day when working in the office," said the report. “If they are working from home their demand for coffee shop products will likely decline.”
On the whole, coffee shop sales are still hurting from the pandemic. Retailers saw a huge drop in the early days of COVID-19. And while things have bounced back significantly since then, sales volume has plateaued in recent months and it still hovers below pre-pandemic levels today.
But in some corners of the country, there are some notable exceptions.
In California, Texas and North Carolina, says the report, coffee shop sales volume is well above pre-pandemic levels. In New York and Florida, however, it’s considerably below that point. Part of the growth in Texas and North Carolina, notes Bank of America, could come from pandemic migration trends, but it’s unlikely that accounts for all of the gains.
“This change in the geographic pattern of demand that is implied by increased prevalence of remote work continues to have implications for the economy even as the pandemic fades,” says the BofA Institute.
When it comes to coffee consumption, roughly one-third of the industry totals happen outside of the home. And according to the Survey of Working Arrangements and Attitudes (SWAA), which has tracked working from home since early in 2020, roughly one-third of all paid work days are currently happening at home.
“While [workers] may substitute demand for coffee close to the office with demand for coffee close to home somewhat, on balance they are less likely to go out for coffee if they can get some at home,” says the report. “Moreover, coffee shops also sell food, and again people are more likely to make their own breakfast, lunch and snacks when at home.”
While the BofA report focuses on coffee sales, it notes that go-juice is just a microcosm of the larger economy—and as companies either return to their pre-pandemic work arrangements or adapt to a hybrid (or fully work from home) model, it could have wider ripple effects on the economy, regardless of the pandemic’s future strength.
And coffee shops are also useful in tracking current waves of COVID-19, as recent sales figures can illustrate how companies are reacting to the rise of Omicron subvariants, such as BA.4 and BA.5.
“In Midtown NYC, the aggregated Bank of America merchant data suggest that recent waves of Covid-19 had a smaller impact on the change in working from home, as indicated by coffee shop sales volumes than the first wave of the pandemic did,” the report reads. “Nonetheless the data will bear watching.”
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