Retail

Why fashion brands have resorted to selling coffee

Kevin Moore /

fashion brands selling coffee

Ralph Lauren has opened coffee shops and mobile, branded coffee vans. Source: supplied.

NAFCS used to stand for ‘not another coffee shop’, with the ‘F’ being silent as in ‘halfpenny’ pronounced ‘haypenny’.

However, as out-of-home sales of food continues to grow, the ‘F’ is changing meaning, and losing its silence.

In the US for the first time since data has been recorded, out-of-home food sales — that’s mainstream and family restaurants, quick service food outlets (QSR) and coffee shops — has exceeded sales of food from grocery stores. We are spending more on feeding ourselves and our families with food and drink prepared by people other than us, and outside of our home. 

In the coffee shop sector, existing brands continue to grow, and new brands, with a point of difference, have space to grow.

I’m writing this blog in a brand new Starbucks in Plano Texas. This area, north-east of the Dallas Fort Worth area, is booming, and has been for almost a decade.

At this shiny new Starbucks, the drive-through has 10 cars in the queue almost all day long. Inside it looks more like a WeWork space than a coffee shop, with over half the guests sitting in front of Macs and PCs, working seven days a week.

Starbucks remains relevant to small business owners, entrepreneurs and road warriors.

In New York, Washington and LA, you walk into a Bluestone Lane coffee shop to see photos of Bondi Icebergs above Bondi beach, sepia old-school AFL and cricket photos, plus real Australian lattes, flat whites and avo on toast. All made with love, in a cashless environment. The brand was launched by a Melbournian working for the ANZ bank. Founder Nick Stone now has a growing chain supported by growth equity from high-net-worth Americans.

In the physical retail fashion sector, however, things are not looking good. In New York, Washington, LA, and even booming Dallas, Gap, Whitehouse Black Market and Ralph Lauren stores are closing and the remaining ones can be lonely places for shoppers and staff. So Ralph Lauren has opened coffee shops and very cool, mobile, branded coffee vans. They’re buzzing and busy so expect to see more.

As we run into holiday season 2019, more major retailers will now have to decide where they go to chase growth.

In 2020, expect to see more well-known, non-coffee or restaurant brands test the water with partnerships or standalone stores in coffee and food.

As more fashion brands move this way, NAFCS will stand for ‘Not another fabulous coffee shop’ darling!

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Kevin Moore

Kevin Moore is a retail expert and the chairman of Crossmark Asia Pacific Holdings and Now Comms Group. He is also an independent director of Australian fintech company InvestSMART.

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