Why Retail Brands Are Racing To Open In-Store Coffee Shops

What is discussed, and when

1. 0:00 – 3:00: Capital One, Uniqlo, Aritzia, Barnes and Noble
2. 3:00 – 6:00: Uniqlo, Capital One, Experience Economy
3. 6:00 – 9:00: Capital One, Barnes and Noble
4. 9:00 – 10:31: Capital One, Uniqlo

Notable quotes from "Why Retail Brands Are Racing To Open In-Store Coffee Shops"

• It's beginning to feel like every brand suddenly has a café from Louis Vuitton to Capital One. And coach. I thought he was buying me my dream purse. But this is what we came…

  about Capital One · at 0:01

• No problem. Companies adding branded cafes to their stores is becoming increasingly common. But there were some early pioneers of the concept. Barnes and Noble partnered with…

  about Barnes and Noble · at 1:08

• One of the reasons that branded cafe concepts have ramped up over the past few years is in response to post-pandemic changes in the retail landscape. So Covid had a huge effect…

  about Experience Economy · at 5:16

Who and what is mentioned in this episode?

Companies & orgs

• Capital One — Company · 7 mentions · first at 0:01
• Uniqlo — Company · 6 mentions · first at 0:01
  It's beginning to feel like every brand suddenly has a café from Louis Vuitton to Capital One. And coach. I thought he was buying me my dream purse. But this is what we came…
• Coach — Company · 4 mentions
• Aritzia — Company · 2 mentions · first at 0:01
  It's beginning to feel like every brand suddenly has a café from Louis Vuitton to Capital One. And coach. I thought he was buying me my dream purse. But this is what we came…
• Barnes and Noble — Company · 2 mentions · first at 1:08
• Dior — Company · 1 mention

Concepts & topics

• Experience Economy — Concept · 1 mention · first at 5:16

Full transcript with timestamps

0:01 It's beginning to feel like every brand suddenly has a café from Louis Vuitton to Capital One. And coach. I thought he was buying me my dream purse. But this is what we came for. Was anyone going to tell me that Aritzia has a café? I'm at the Uniqlo store on Fifth Avenue in New York City. It's one of their global flagship locations, and at first you see jeans and shirts when you walk in the store. But go to the second level and you'll see this... A coffee bar tucked away into the corner of the store. We're trying to make more like a service floor where people can pick up their clothing, repair their clothing, customize their clothing while also enjoying their great coffee or great matcha. I've long said that the easiest way to get in the experience business is to add a café, because it engages all five senses, and it gets customers to spend more time with you. CNBC took a look at why retailers like Uniqlo are

0:56 getting into the coffee business. No problem. Companies adding branded cafes to their stores is becoming increasingly common. But there were some early pioneers of the concept. Barnes and Noble partnered with Starbucks starting in 1993 to introduce cafes in its bookstores. Target also partnered with Starbucks starting in 1999. Over a decade later, both Ralph Lauren and Capital One opened their first cafes in New York City and Boston, respectively. One thing that we knew from the beginning would be important with cafes was that the environment was very welcoming and that people didn't feel like they were being sold to. And so from the very beginning of the cafes and continuing today, we do not have a sales focus for the Capital One associates who work there. Capital one told CNBC that it now operates 65 cafes nationally, and Ralph Lauren operates over 40 cafes across the world in cities like London, Barcelona, Hong Kong and Singapore.

2:05 Another early adopter was Aritzia with its AOK cafe, which started in 2018 and has scaled to 13 locations. These established players have found a concept that works and are continuing to grow, but the past five years has seen a wave of newcomers. Uniqlo, for example, opened its first cafe in Tokyo in 2021. This New York City Uniqlo coffee is the first location in the United States. It opened in March of 2025. But globally, the company has a total of nine coffee shop locations. The reason to wait until 2025 was really to make sure that we are being recognized as a brand in this market. Now we have a strong base. We can continue to grow and add up new services and to continue to enhance that shopping experience to the US customers. In 2024, Coach got in on the game too. The brand, which has seen a cultural resurgence amongst Gen Z, saw a revenue increase of 22% in its most recently reported fiscal quarter. Coach opened its first cafe in Indonesia to test

3:07 the offering. Since then, it has opened four in the US and over a dozen more internationally. The data that's been really, really fascinating is we're seeing double to triple digit increase in the retail store sales with having a coffee shop from the increased traffic. The trend has become especially prevalent in the US amongst luxury brands over the past few years. Fashion house LVMH opened a Dior cafe in Dallas, a Louis Vuitton cafe in New York, and remodeled its Tiffany brand's Blue box cafe. Prada, which is not a part of LVMH, is also rumored to be opening a New York location in 2026 after opening cafes in London and Singapore for higher end brands. It also presents an opportunity for customers to make a purchase, even if they wouldn't normally be able to afford to shop at the store. Sure, a coffee may run you upwards of $9, but that's more of an attainable luxury in stores where 3 or 4 digit price tags are the norm. We've actually seen a lot of younger customers come in 13, 14 years old, and we're seeing them be able to experience coach with some of the money that they may have earned from allowance and be able to have a pumpkin, matcha, or a chocolate chip cookie. So we see it

4:18 across all generations, but maybe using it for different ways and different reasons. And even if you are already buying from coach, Sanders says that shoppers can afford a cup of coffee a lot more frequently than a handbag. But there are, of course, additional costs associated with this type of venture. Coffee itself has become an expensive product, volatile weather conditions for coffee growers and more recently, sweeping US tariffs have sent prices soaring. The companies we spoke to are taking different approaches on operating the actual cafes. Uniqlo and Coach are adding cafes to existing store locations. Capital One, on the other hand, says it's building locations with the cafes in mind as they take up more space than a typical bank branch. The company then hands off operations to a third party. We provide the space, but Capital One actually doesn't operate the coffee and food and beverage sales and production in the cafes.

5:16 One of the reasons that branded cafe concepts have ramped up over the past few years is in response to post-pandemic changes in the retail landscape. So Covid had a huge effect because it really decimated the experience economy. And yes, we can still buy any goods that are out there contactless. We can have them delivered to our home. And so what does it take to get people to go out to the stores? Right. You need to be able to have experiences that they value. And cafes again, are the primary way to be able to do that.

5:46 When retailers open coffee shops, it can increase their brand exposure, can also drive incremental foot traffic and keep shoppers inside their stores for longer. Primary reason for having a Uniqlo coffee in our store is obviously to bring more customers to the store, but also to have an inviting space for them when they come shopping. The interest behind in the concept behind is to make you feel at home, to be part of the brand, to feel the brand, to also spread the Japanese culture. Because we are Japanese company. Capital One's situation is a bit more unique. It's not an apparel retailer, so cafes offer a bit of a different opportunity. The cafes are meant to be a showroom of Capital One. Bank accounts and credit cards and money are things that don't always feel tangible. And so the cafes can show, you know, can show up as a personification of what is Capital One. But across all types of companies, cafes create an opportunity for revenue

6:43 growth in a saturated retail environment. If you design the cafe to be able to operate it at a profit, and there's no reason today's day and age where the people are paying for coffee, that you can't do that. And yet it's a demand generator as well. It gets people to come in and may get them to make an extra visit every month, or every quarter, or every year. It may get them to buy more because they've slowed down and they looked at things. I think we look at two aspects right when we open the coffee. There's one aspect that is making profits, which we are obviously monitoring week over week, month over month. And then the second aspect is really about the customer and really, the reason why we opened this coffee is to really help our customer and enhance their shopping experience.

7:31 As more and more brands open their own cafes, the retail coffee concept will become increasingly commoditized. What's something that you need to refresh to think about how you change this over time, and you need to design it uniquely, right? It's not enough. Like Barnes and Noble originally putting Starbucks in the stores. You have to create your own brand. The Tiffany Blue Box Cafe, a beautiful example of that. So that it's not just about the coffee, it's about immersing you in the brand values, in the brand colors, in what it stands for. One of Coach's best selling bags is called the Tabby. It's created a special cake at its cafes to complement the product. Looking at changing the color of our tabby cakes like throughout the seasons, we're also looking and working with our product development teams on what are some of the new icons or things that might be coming out as a brand, and then how do we actually turn those into

8:21 something that our customers can eat or drink? I do think that brands look at each other and see what they're doing. There is a little bit of a herd mentality going on regarding that, and I think that is the case with the cafes. But I think also that everyone is doing it differently. Everyone that I've seen has their own take on it. Capital one, for example, makes the experience more rewarding for its banking customers, cardholders of Capital One and Discover, which it acquired in a $35 billion stock deal in 2025. Get 50% off on beverage purchases. Another differentiating factor between these different companies is the locations of their cafes. We place the cafes in premium destinations in a city, in areas where there are a lot of people, and because of that, we need fewer of them. While we may invest in a large cafe on a very busy street corner with a more traditional branch strategy, we would need to have many,

9:14 many more branches to cover that area. Whereas for coach, its strategy with cafes is focused on outlet locations. Specifically, we see an opportunity for our customers who may not know the difference between a retail store and an outlet store. It's just their mall, right? They're just going to hang out with their friends or with their family, or have an experience in the mall. We believe it's a commercial venture that's scalable throughout the country. Coach said it expects to be opening 12 to 15 cafes per year moving forward, and Capital One said it had openings planned for 2026 but wouldn't disclose a number. Uniqlo, on the other hand, is taking a more tempered approach for 2026. So far, we don't have yet a location confirmed. This is a slow, very strategic way of thinking. We want to make sure that first we hear from our customers at Fifth Avenue that we understand what they're looking for when they come to Uniqlo. Coffee.

10:09 What beverages, what pastries. What other services can we bring to them? Once we have a clear understanding, we will continue to expand to other locations.

Questions about this episode

What is discussed in "Why Retail Brands Are Racing To Open In-Store Coffee Shops"?

In order: 0:00 Capital One, Uniqlo, Aritzia, Barnes and Noble; 3:00 Uniqlo, Capital One, Experience Economy; 6:00 Capital One, Barnes and Noble; 9:00 Capital One, Uniqlo.

What is mentioned in this CNBC episode?

7 people, works and ideas are mentioned, including Capital One, Uniqlo, Coach, Aritzia, Barnes and Noble, Experience Economy. Each one on this page links to its own page with every episode that mentions it.

How long is "Why Retail Brands Are Racing To Open In-Store Coffee Shops"?

The episode runs 11 min; the transcript is about 1,839 words in 12 timestamped sections.

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