LONDON – The total UK coffee shop market is estimated at 16,501 outlets and continues to show strong sales growth of 6.4% on last year with £6.2 billion total turnover, according to coffee specialist Allegra Strategies definitive report, Project Café13 UK.
The branded coffee chain segment recorded £2.6 billion turnover across 5,531 outlets, delivering sales growth of 9.3% and outlet growth of 5.9%, adding 306 stores in 2013.
After 15 years of growth, the coffee shop sector continues to be one of the most successful in the UK economy. 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 year 2013. 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.
A greater commitment to coffee credentials by the non-specialist sector, such as pubs, fast food and supermarkets has 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. Allegra forecasts the total UK coffee shop market will exceed 20,500 outlets and turnover of £8.7 billion 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 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.”
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