The Texas-based bakery café chain says reduced commuter trade due to sustained home working following the pandemic led to an unsustainable decline in earnings and revenue
Corner Bakery operates approximately 140 outlets having closed 35 stores since 2019 | Photo credit: By John Phelan CC BY-SA 3.0
US bakery café chain Corner Bakery has filed for bankruptcy, citing a fall in commuter traffic across major US cities as the leading factor behind its declining revenues.
The Texas-based chain, owned by multi-restaurant operator Pandya Brands since October 2020, said it is among a growing number of cafés in the US struggling amid shifts in customer footfall, driven by increased home-working following the pandemic.
World Coffee Portal research shows that urban-centric Corner Bakery operates approximately 140 outlets having closed 35 stores since 2019.
Bankruptcy documents filed by Pandya Brands state that many Corner Bakery stores remain profitable, but under-performing outlets are burdening the company.
Falling revenues as a result of reduced workplace catering and lower commuter footfall were exacerbated by rising inflation and raw materials costs, supply chain disruption and a challenging labour market, Pandya Brands said.
The multi-brand restaurant company, which also operates the Boston Market restaurant chain, said Corner Bakery is also dealing with ‘increasingly impatient’ landlords following the cessation of government-funded Covid-relief payments to help businesses with rent.
‘Like many urban, fast-casual concepts, Corner Bakery struggled during the pandemic and saw sharp declines in earnings and revenue. Office closures proved especially problematic for Corner Bakery, as a large part of its revenue is derived from catering for workplaces, as well as breakfast and lunch for commuters,’ Pandya wrote in the bankruptcy document.
Several US bakery café chains have struggled with reduced footfall as office workers adopted more flexible remote working patterns.
The US division of Belgium’s Le Pain Quotidien filed for bankruptcy in May 2020, with New York-based Aurify Brands providing a funding package to continue operations in the country, before acquiring all US units for $3m. The bakery café chain, which has 56 outlets across the US, has since joined fellow New York-based hospitality group Convive Brands.
Remote working was also cited by UK-based coffee and food-to-go chain Pret a Manger as hampering its US recovery last year. The JAB Holding-backed business, which operates more than 80 stores across the US, said a fifth Covid-19 wave in New York in June 2022 hampered sales.
Additionally, Panera Brands, the parent company of 2,170-strong coffee chain Panera Bread, said 'unfavourable capital market conditions’ led to it putting IPO plans on hold in July 2022.
World Coffee Portal forecasts the total US branded coffee shop market will exceed 41,900 outlets by 2027. Despite a difficult economic climate, the food-focused segment is forecast to exceed 7,600 stores during the same period.