The
total UK coffee shop market is now estimated at 16,501 outlets with strong sales
growth of 6.4% last year and turnover hitting £6.2bn.
According to a
report (Project Café13 UK) by Allegra Strategies, the branded coffee chain
segment recorded £2.6bn turnover across 5,531 outlets, delivering impressive
sales growth of 9.3% and outlet growth of 5.9%, adding 306 stores 2013. Costa
Coffee (1,670 outlets), Starbucks Coffee Company (790) and Caffè Nero (560)
remain the UK’s leading brands with 54% branded chain market outlet share.
Physical expansion by leading chains remains the core driver of market
growth. In particular, Costa added 118 UK outlets and 18% sales growth in
calendar 2013.
The report also shows that the UK is now a nation of
great coffee drinkers. One in five coffee shop visitors visit coffee shops every
day compared with one in nine in 2009, drinking an estimated 1.7 billion cups of
coffee per year in coffee shops.
Coffee venues increasingly play an
important social and community hub function as well as being a large contributor
to UK employment and economy. The report reveals how successful branded chains
constantly refresh their image while retaining brand values in order to engage
increasingly progressive consumers.
A greater commitment to coffee
credentials by the non-specialist sector, such as pubs, fast food and
supermarkets has also generated wider consumer participation while adding to
competitive pressures. Furthermore, third wave/artisan coffee has profoundly
influenced operator and consumer expectations about coffee quality and store
design.
Meanwhile, the significant growth of new, corporate backed
chains such as Harris + Hoole (Tesco) signals a new era of competition, whilst
premiumisation of the at-home segment is further increasing the availability of
specialty coffee.
Allegra forecasts the total UK coffee shop market will
exceed 20,500 outlets and turnover of £8.7bn by 2018, with 4.5% annual outlet
growth over the five-year period. The branded coffee shop segment is forecast to
exceed £4.1 billion across 7,000 outlets by 2018 with outlets predicted to grow
at 5.2% compound and revenue at 10.0% compound over the next five years.
It is estimated that the UK has the long-term potential to comfortably
host more than 9,500 branded coffee shops. Allegra predicts that the future
coffee shop marketplace will be shaped by further increasing consumer
participation and more savvy consumers, with the desire for premium quality
coffee anywhere and anytime, driving improved coffee offers across a broader set
of channels.
Allegra Strategies’ Managing Director, Jeffrey Young said:
“The UK coffee shop industry is showing consistent strong growth in both sales
and outlets. Britain is now a nation of great coffee drinkers.
“The UK
consumer increasingly appreciates a quality cup of coffee and operators must
continue to deliver innovation, fantastic quality while genuinely engaging with
customers in order to stay ahead of the curve.”
He added: “UK Consumers
will become even more knowledgeable on the subtleties of coffee preparation and
delivery from bean to cup, in particular origin, roast, as well as the
importance of milk foaming and water quality.
“We expect to see growing
consumer interest evolving beyond simple commoditisation of coffee as a drink,
with artisan cafés and branded chains increasingly educating them about the
craft of coffee.”
NamNews - Wednesday 15th January 2014