Expanding the Conversation: Specialty Coffee Retail Sentiment Index (RSI)

Expanding the Conversation: Specialty Coffee Retail Sentiment Index (RSI)

TThe specialty coffee community is often referred to as a big family, and industry events are like our family reunions. We all get together, have conversations, and inspire each other with thought-provoking debate and dialogue. We talk about what is going on in our own coffee corners of the world and, after the event, we return home to continue our personal coffee journeys.


Let’s focus for a moment on the retailer segment of the industry. Perhaps you can think back to a conversation you have had with a friend at a coffee event. You and your friend both own a coffee shop and the conversation may have gone something like this:

Your friend tells you she just opened another shop on the opposite side of town and is excited because the business is growing. She also plans to open two more shops in the next year. You share that you are planning to hire two more baristas to keep up with the increased morning rush. However, you are nervous about minimum wage increasing in next year and you just found out your cousin, who owns a coffee shop in a different state, is going out of business.

Are you a specialty coffee retailer? Help us measure the condition of the industry by participating in the January 2018 survey: click here to start.

Looking at this conversation from an economic perspective, there are indicators that reveal the health of the retail segment. Let’s dig deeper to identify them….

  • Your friend’s business growth and coffee shop expansion are positive signs for the current economy.
  • Planning to open two more shops in the next year is a positive sign for the future economy, expressing your friend’s confidence in selling more coffee.
  • Your increase in workforce is a positive sign of consumer demand.
  • Your anxiety of an increase in minimum wage is a negative sign for the business owner’s future because that would mean labor costs would increase.
  • Your cousin who is going out of business reflects a negative economic sign and brings the worry that other businesses may not survive either.


Overall, the conversation reveals a pretty positive sentiment with a few worries. Its safe to say, based on this conversation, the retail segment is healthy. But, this is just one conversation. What about other retailers’ experiences in the industry? How do we know their stories and sentiment? What would the bigger picture look like if we knew? How would our perspective and business decisions change if we knew how retailers were doing, collectively?

This is where the Specialty Coffee Retail Sentiment Index (RSI) comes in. The RSI measures the degree of optimism that many retail owners are feeling and expressing based on activities of hiring/laying off employees, opening/closing stores, assessing the financial condition of their own company, and assessing the financial condition of the industry.

How does it work?

The RSI is presented as a semiannual index number on a scale of -100 to +100, with 0 being neutral. The index number is calculated based on results of a survey that is sent out to retailers with questions about business activities and financial conditions. The answer options for each question are consistent and can be either positive, negative, or neutral. For example, one question asks if retailers are planning to increase, decrease, or keep the same number of retail operations within the next year. It is positive if the answer is increase stores, negative if the answer is decrease stores, and neutral if the answer is stay the same. By keeping the answer options consistent, an index number can be easily calculated, reflecting overall retailer sentiment.

The RSI offers an extension to conversations. It enables us to understand retailers’ sentiment on a larger scale, with evidence to support. It helps us see the retail segment and how healthy or not so healthy it may be.

There are over 32,000 coffee shops in the U.S., about 315,000 in Western Europe, and many more throughout other countries in the world. It is difficult to know how coffee retailers are feeling about business collectively, but the RSI brings us a step closer. (Source: Mintel & Euromonitor)

How can this tool be used to help in your business?

It is important to know what is going on in the market and measure the health of the retail segment because it can help in business planning. Knowing elements of the market could potentially prevent a decision from being made that would lead to going out of business. When deciding your next move to grow your business, it is important to ask questions and even more important to answer those questions. What are others in the industry are doing? Is business good for retailers across the country or the world? Are people struggling? Are companies profitable? Where do you fit in? Information is key.

SCA began tracking retailer sentiment in 2015 and it has slowly decreased from 66.5 to 57.5 over the past few years. Remember, the scale is -100 to +100, so the sentiment has remained positive overall.


What have we learned from the RSI in the last three years?

Surveys are collected from retailers all over the world and the response mix has been consistently 70-80% U.S and 20-30% non-U.S. The first report in January of 2015 showed that retailers were feeling very positive, with an index of 66.5. Many people were expressing a strong confidence in the future financial condition of their company. There was hope that businesses will keep getting better.

Since 2015, significant global events such as Brexit and the U.S. presidential election in 2016 have contributed to feelings of uncertainty about the economy, as noted by survey respondents.

Themes retailers have voiced over the last three years:

  • Business is expanding with people opening new locations and hiring more employees.
  • High employee turnover has been a threat.
  • Labor costs have increased because of the minimum wage increases.
  • Competition is making it difficult to differentiate business.


In July of 2017, the RSI was the lowest in three years at 57.5. Results show it was driven by people feeling less positive about their financial condition and the pace of store expansion has slowed. At the same time, people continue to report their business growing.

We are continuing to survey retailers, with intention of gaining deeper insight every year. The 7th iteration of the RSI Survey is now open. Help us increase our reach and strengthen these conversations. Contribute your voice by taking the January 2018 survey.

Previous Reports

Are you a specialty coffee retailer? Help us measure the condition of the industry by participating in the January 2018 survey: click here to start.