How are people’s behaviors changing as we ride the waves of recession and lingering effects of Covid? Are we shifting our spending habits, and if so, how is that affecting brand loyalties and foot traffic to physical stores?
To assess this change in behavior, we examined historical Starbucks foot traffic from Q1 of 2021 and 2022 compared to Dunkin Donuts locations across the United States.
Below, we’ll start with a look at each brand’s relative national presence and foot traffic, before zeroing-in on a handful of key market battlegrounds for 2023, and suggesting a few ways to interpret things for competitive intelligence purposes.
In terms of total foot traffic, Starbucks foot traffic outpaces Dunkin Donuts nationally by a factor of ~1.8:1, with 80+ million visits in late March representing the peak traffic moment for the up-market coffee leader. Uncontested in the northwest, Starbucks market dominance runs into stronger competitive headwinds the further east you go.
By the time you get to Pennsylvania, Dunkin Donuts is firmly in charge. The brand’s footing remains solid all the way out to the Atlantic coast, and north to Canada. To the south, it’s competitive all the way down to Florida.
In the areas between, the two have meaningful competition in several markets. Some counties’ winners are tougher to call than a midterm election. Let’s examine a few of those battlegrounds to see what we can learn.
Battleground states and cities
Both coffee retailers have made a conscious effort to push down into the southeast, with the large and lucrative Florida state market a key regional battleground. While overall ratio of traffic is ~3:2 in Starbucks’ favor, Dunkin Donuts makes a serious challenge for total foot traffic in key counties, including Broward (Fort Lauderdale), Duval (Jacksonville), Hillsborough (Tampa), and Lee (Fort Myers), representing different regional areas of strength to the north, east, south and west of Florida.
Illinois denotes an interesting point in the battlelines between Starbucks and Dunkin Donuts. In addition to being home to one of America’s larger metropolitan markets, Chicago, it is also among the most hotly contested states in the coffee wars. Starbucks wins the state, and its biggest market, Cook County, by a margin of about 55% to Dunkin Donuts’ 45% of total foot traffic. Move outside the Windy City and Dunkin Donuts starts winning collar counties and smaller markets, including Will County (Joliet) and Lake County (Waukegan).
It seems like no matter the occasion, Ohio is a battleground state. Starbucks foot traffic leads the way with about 62% of total measured foot traffic, as compared to Dunkin Donuts 38%, but the closer you get to the Pennsylvania border and smaller counties, the less Starbucks tries to compete, and here is where Dunkin Donuts’ northeastern dominance begins. From this point east and north, traffic consistently runs from 3:2 up to 4:1 in Dunkin Donuts favor, including in major markets, such as Philadelphia, New York and Boston.
Competitive Intelligence Interpretations
Both brands should expect a drop in foot traffic between the middle and end of Q1 2023, with visits dropping sharply after peaking mid quarter. In 2022, Starbucks foot traffic dropped ~6.5% in this time, whereas Dunkin Donuts dropped about 16%. A change in those numbers for Q1 of 2023 could indicate a shift in behaviors consistent with recession (e.g. a movement to the lower priced brand option).
Starbucks is virtually unchallenged by Dunkin Donuts west of Kansas. If they want to address opportunity in head to head markets, a deeper push into the major markets of Pennsylvania and New York, as does shoring up footing generally in the Great Lakes States. Most important though, may be the key battlegrounds of the southeast states where competition between the two brands for foot traffic is fiercest.
Dunkin Donuts' strength in Florida is something to build on. With better than perhaps 110 million visits up for grabs in the state in Q1 of 2023, Dunkin Donuts is in a position to grab a greater percentage of traffic if the brand can stave off the effects of its historical late Q1 drop off. A key factor driving this may be the transition of consumer foot traffic from up-market option Starbucks, towards Dunkin Donuts locations.
You can study other competitive coffee retailers, grocers, pharmacies, restaurants and many other markets by checking out our blog or case studies, or by contacting one of our location data experts today.