OCS Holds Steady in the Recession

March 20, 2009
The consumer’s taste for good coffee remains strong despite a more challenging economy. OCS operators willing to help customers manage costs have been able to sustain coffee sales.

CS operators overall remain optimistic about OCS, despite the recession, according to an online nationwide survey of 250 operators regarding activity in a recent 4-month period. The most common approach to improving account profitability has been to reduce service frequency, as indicated on chart 4.

Most operators noted that customers are asking for help in managing costs. The most common response has been to switch to a less expensive coffee, as shown on chart 3B. The second most common approach was to offer different products or services.

Significantly, only 6.6 percent of respondents reported lowering their coffee prices, which indicates that most operators have not resorted to price cutting in order to keep customers.

Overall, the results demonstrate that customers recognize the value of OCS and are willing to pay for it.

The State of the Coffee Service Industry in July reported that the majority of OCS operators increased their prices for four consecutive years, marking the longest period of price increases in the industry’s history.

In the 4-month period ending in January, the percent of operators citing a decrease in same store sales was slightly larger than the percent citing an increase.

The online survey was completed by more than 250 OCS operators nationwide in early February.