Coffee Shops & Snack Bars NAICS 722515

Apr 14, 2025 - Coffee Shops Raising Prices

• President Trump’s tariff blitz threatens to raise the price of coffee drinks, CBS News reports. Currently, there is a 10% base global tariff in place on all US coffee imports. Countries including India, Indonesia, Vietnam and other coffee-producing nations are subject to even higher levies, which the administration has paused for 90 days. A mere 1% of the coffee consumed in the US is sourced domestically, mostly from Hawaii and Puerto Rico, according to the National Coffee Association. The rest – 99% of raw coffee beans – is imported. Coffee bean prices were already soaring due to unfavorable weather in key producing countries, including Brazil and Colombia, before tariffs threatened to raise prices even more. The duties, called "reciprocal tariffs," are making it more expensive for coffee shops to import beans and absorb other costs of doing business, with some shops already passing their elevated costs on to customers.
• Driving on-premise traffic will be a higher priority for restaurant operators than capturing off-premise visits this year, according to the National Restaurant Association’s State of the Industry Report 2025. During the pandemic and its aftermath, restaurants, by necessity, focused on their take-out and delivery services. Now, according to the report, 81% of consumers say they would eat at full-service restaurants more frequently if they had more money to spend. Across segments, restaurants are prioritizing on-premise service with 60% of quick-service restaurant (QSR) operators saying on-premise visits would be more important in 2025 than off-premise, while 90% of fine dining operators said the same, per NRA’s report. Notably, Starbucks is focusing its effort on improving the dine-in experience and making its cafes more appealing places to linger. QSR customers identified store cleanliness as one of the most important factors determining their visit, per the NRA survey.

• For the first time in its history, the price of coffee futures on the commodities market topped $4 per pound in February, according to Business Insider. Year-to-date, coffee futures prices are up almost 35% and have more than doubled from the same time last year. Climate change, dwindling global stockpiles, and President Trump’s threat to impose a 25% tariff on all goods from Colombia, including coffee, are driving up coffee prices. Although the tariff threat to Columbia was ultimately removed, Trump’s threats of sweeping tariffs and the possibility of a resultant trade war have added instability to commodity markets, including the coffee market. Volatile prices for coffee beans can affect coffee shops’ gross margins and shops must regularly monitor their cost of goods sold and adjust prices to maintain or improve their margins. But that can be hard to do amid growing competition among coffee shops.
• Employment by coffee shops and snack bars grew 4.4% in January compared to a year ago while average wages at limited-service restaurants rose 4.2% over the same period to $16.55 per hour, according to the latest US Bureau of Labor Statistics data. Industry giant Starbucks recently announced a new minimum wage of $15 per hour, with an average wage of $17 per hour. Rising sales for food services and drinking places along with sustained consumer spending – up 2.7% in February year over year and 0.1% versus January – have been supporting rising industry payrolls. But that may be about to change as plummeting US consumer confidence --triggered by President Trump’s tariff threats and economic turmoil -- causes more people to skip expensive coffee drinks in favor of home brewing.