Pastries Not Getting Soft - Consumers are feeling this inflation tax right in the wallet. While the Inflation Reduction Act hasn't taken effect yet (sarcasm), the price of just about everything is still on the rise.
We cheered at July's inflation numbers because it meant that the rate at which prices were rising had slowed. Prices are still going up, lest we forget.
Consumer spending has slowed of late, and we've been hearing about it in almost every earnings call from CEOs who are worth a sh*t and who tell it like it is.
Not just in retail but also at restaurants, the consumer has dialed down their spending.
But, there is a slight exception to this rule.
Coffee shops, bakeries, donut shops, and pastry shops all saw solid demand, especially when you compare this uptick to the downtick in restaurant spending.
The reason: as more and more workers (are forced to) return to the office, buying a bagel and a cup of Joe seems like a small treat in an otherwise meaningless office-dwelling-existence.
Kidding aside, a muffin with a latte is a relatively small indulgence compared to grabbing drinks or going out for a meal.
This is perhaps an overgeneralization. In places like Boston, San Fran, or the City, a muffin and a latte can easily run you more than $10, more than the cost of a burrito bowl at Chipotle in most places.
People are addicted to caffeine. We love the stuff. Literally can't get enough.
But workers are even more addicted to their routines. If you stop at the same pastry maker every Friday to grab that pumpkin spice scone, you're probably going to tolerate an extra buck out of pocket to keep things sane in your life.
The fix is in; commuters spend more money on coffee. So whether it's instant coffee from a vending machine or some frou-frou gourmet drink with an extra shot, a fiver here and there on coffee bean juice isn't unreasonable.
I don't know about you, Apes, but a cup of coffee gives me at least as much joy as the cash that I pay for it. I think that's why Americans keep coming back for more every morning.