Coffee Predicting Economy Rebound

November 9, 2009

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Although McDonald had basically roughly sales, its McCafe espresso-based coffee drinks did well

Starbucks posted higher quarterly profit — and it wasn't just from cost cutting. Traffic at stores is improving.

McDonald's and Starbucks have been locked in battle with consumers paring back luxury spending. Starbucks has been trying to keep its customers coming in. McDonald's has been looking to poach some customers from other coffee shops while converting existing customers to premium beverages.

Perhaps the strength in fancy coffee drinks signifies something more. No matter where it's purchased, a latte is more luxurious than a plain cup of coffee. It's a little treat. Maybe consumers are easing back into splurge mode.

If purchases of high-end beverages means the consumer has turned a corner, maybe peaceful co-existence can emerge in place of coffee wars.

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