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Ground zero: What happened to all the coffee shops once corporate America stayed home?

“We’ve had notes from people saying, ‘If you weren't open for me to come and get my coffee every day, I don't know where my mental health would be,'" said the owner of a coffee shop in a residential neighborhood.
Image: Saint Frank Coffee
Joshua Kaplowitz, Katarina Smit and Jason Yeo serve customers at Saint Frank Coffee in Russian Hill, San Francisco, Calif.Albert Law

As former U.S. Marines, Compass Coffee founders Michael Haft and Harrison Suarez are no strangers to hardship. But 2020 has proven to be a challenge.

Before the pandemic hit, their 12-shop coffee chain, based in the Washington, D.C., area, reaped most of its business from busy working professionals looking to grab a cup of joe on the way to work.

Now, those customers are working from home, triggering an 80 percent drop in business for Compass and the temporary closure of its six downtown cafés.

"The challenge that we face is the same as basically every small business across the country," Suarez told NBC News. “We're planning to reopen. People need to go back to work in the offices for that to make sense."

According to Foursquare, foot traffic in all coffee shops across Washington, D.C., is still down over 60 percent since March.

Like other commuter-friendly businesses such as podcasts, beauty products and transportation services, coffee shops in corporate neighborhoods of major U.S. cities have suffered during the pandemic as the majority of Americans continue working from home.

“It's a tough time right now for the coffee industry because a big part of their traffic was that morning rush,” Darren Seifer, Food and Beverage Industry Analyst at The NPD Group, told NBC News. "With consumers staying in-home, for the most part, that natural foot traffic isn't happening right now."

Birch Coffee team members serve free coffee to frontline health care workers outside Montefiore Hospital in New York City. Benjamin Kanes

Birch Coffee, a chain in New York City, has seen a 50 percent drop in revenue since the pandemic began, according to co-owner and CEO Jeremy Lyman. The bean brewer was not able to reopen any of its 13 locations until the end of May. Its newest location on Sixth Avenue only makes about $300 a day — about $4,000 below projections, Lyman said.

“That would be our busiest store just because of where it was, foot traffic, everything,” Lyman told NBC News. “Now it's just deserted.“

“It's been really tough across the board for everyone in our industry,” Lyman said. “We have been fortunate in the coffee world — and it still hasn't been kind. There are people that have gone out.”

Some New York City coffee shops that have shut their doors for good include The Skilled Archer, By Name, Caféine, and Chocolateria, according to Eater NY.

The ones that do remain open in the city are still seeing 50 percent less traffic than before the pandemic began, according to Foursquare. That number has steadily increased from a low of 20 percent in early April.

For people who actually do venture out to grab coffee, they’re doing so at shops closer to home rather than those by the office. Some coffee shops in residential neighborhoods have seen in-store sales soar this year, as weary work-from-home professionals seek out a break from the sofa-to-fridge routine.

“Broadly speaking, we've seen U.S. transactions migrate from dense metro centers to the suburbs, from cafes to drive-throughs, from early mornings to mid mornings with outpaced recovery on the weekends,” Starbucks CEO Kevin Johnson said on an earnings call in October, adding that the company would be focusing on pickup and other contactless options over the next year.

Smaller shops have also branched out, expanding their e-commerce platform or devising new products. Compass started its own line of K-Cups and Nespresso capsules as a way of meeting customer needs.

“We saw people were stuck at home — and they didn't really want to make complicated coffee. They wanted something easy,” Haft told NBC News.

Saint Frank Coffee, a small chain in San Francisco focused on cultivating strong relationships between coffee farmers, employees and customers has seen its best business this year at its original location in Russian Hill.

Saint Frank’s founder and owner Kevin Bohlin has witnessed what getting away from the home office and going out to get coffee close by can do for a person during these trying times.

“We’ve gotten notes from people saying, you know, ‘If you weren't open for me to come and get my coffee every day, I don't know where my mental health would be,’” he said. “It may only be 60 seconds, but that can fill somebody’s tank and give them something and so it's been cool to see that.”

“This year’s been hard for everybody,” Bohlin said. “What coffee can do, you know, in so many ways to connect people and revive your spirit… It's a beautiful, encouraging thing to me that that's happened.”