Sales Decline?

[ourcoffeebarn]

Our coffee sales have stayed about the same or slightly increased :grin: over the last 6 months, but our equipment sales have dropped by at LEAST 75%

Have any of you that sell both equipment and coffee had similar drops?
Why did my traffic increase and sales go down?
Frustrating!!!
Any feedback will be welcome!

 

[Alun_evans]

I was wondering when someone would post something like this- many of the other forums around the place have been debating and discussing the effect of the recession in the US for a while now. In brief we hslow down in coffee sales, first 1/2 was also good for machine sales. However, obviously we are like on the very end of the tail of this thing- meaning the slow down globally has not reached us yet.

Interestingly, reading about the great depression recently, coffee was one of the very few sectors that did not suffer a slum in the 1930's. Iwould not say coffee is recssion proof- but I guess those of us who drink coffee (and pay for it) probablywould cut back on other luxuries before going cold turkey. But 1 thing that we may see, and maybe ourcoffeebarn has hit the nail on the head here- perhaps docket averages will drop a bit.

One interesting debate I have been following on another website is about whether now is a good time to be opening a cafe/coffee shop- especially with all the negative data pointing to higher unemployment, equity issues, dropping retail sales, foreclosures....etc. The Starbucks closures (600 in the US and 2/3rds of all stores in Australia) has got many potential investors and/or opperators nervous. Their (Sbux) poor second 1/4 results have also fuelled the fire. However... I think many of that companies problems are related more to opperational issues and perhaps consumer changes than to the economy. At the same time as SBUX was announcing its first 1/4ly loss since 1994, Peets Coffee was announcing a solid profit and increase in sales.

I guess, hopefully rightly,that most of us are still doing fine with coffee and cafe sales- fine meaning growth not stagnant. I would think that yes, the equiptment side of the business may be a little flat at present- due to perceived uncertainty amngst new entrants into the market and a wait and see from established opperators. However I would think the US in particular has a long way to go until the coffee market reaches saturation. I dont know the numbers in the US, but in Italy there is 1 cafe/coffee shop for every 400 Italians. Coffee has ALWAYS been a very big part of American life (Mark Pendergasts "Uncommon Grounds" is an excellent insight in to just how important a part coffee played in the country last century- worth a read :grin: )

 

[ourcoffeebarn]

My customers have seemed to change from ordering 2 pounds at a time to more of them ordering one 5 pound bag of roasted coffee, that has free shipping I attribute this to people saving money by buying in larger quantities to get the per pound price as low as possible. I also have not been able to keep my "Ready to Ship" roasted coffee section stocked very well with more people ordering from it and the fact that I have been roasting and bagging into 5 pound bags more, instead of short batches and 1 pound bag orders.

I hope the US market starts seeing the cost savings of Home Espresso Machines vs StrBks soon! Better coffee (with some practise) and cheaper too!

 

[ElPugDiablo]

At the same time as SBUX was announcing its first 1/4ly loss since 1994, Peets Coffee was announcing a solid profit and increase in sales.

Neither Starbucks nor Peets, but I am not seeing any slow down in Connecticut. Many eateries and coffee places are busy as usual. I don't sell any equipment, but high end tea pots that I sell are still going out the door at steady pace. And I am not seeing people trade down to drip from $4.00 espresso drinks....Although Starbucks did close 5 ridiculously located shops in Connecticut those near me are still printing money for Howard.

 

[Alun_evans]

Just out of interest, I read sometime ago that SBux made almost as much out of real estate than they do out of retail. What % of the stores closed were in rented space I wonder vs retail space owned by the company? On another note, I am s little P.O'ed with the company...they have raided 1 of my small origins and brought up nearly all of the very, very small quantity of coffee grown there. I am figurng it is most likely SBux Japan, who have a quota of "interesting and unique" origins you would not normally see being sold in the US, Oceania or Europe. I am gonna have to fly to this locale and sort it out- although it has somewhat stumped me- did not see it coming :evil: