The UK coffee shop market grew by around 7% in turnover last year to £9.6bn. A new report from Allegra World Coffee Portal, ProjectCafé2018 UK, shows 1,215 new coffee shops opened last year with 24,061 open in total. That's almost 3 per day and represents 5.3% growth.
A whopping 71% of coffee sector executives interviewed by Allegra were positive about the future although issues such as Brexit have hit like for like sales and hampered outlet growth with many consolidating their current position. Increased tourism and "staycations" also boosted sales last year
Starbucks, Costas and Nero still dominate with a 52.9% of the total branded chain market
Artisan chains like Gail’s, Grind and Joe & The Juice gained ground in 2017 by embracing the premium-quality coffee, up-market cakes with a wider range of gluten free cakes and vegan items and a focus on service to make them stand out from the chains.
Allegra predicts that the total UK coffee shop market will top 31,000 outlets, with a turnover of £13bn by 2022.
Allegra Group CEO, Jeffrey Young, said:
“The UK coffee shop market continues to be robust despite current challenges, laying down modest growth in 2017 amid severe concern over the Brexit impact on jobs and investment…
“As the market matures, and we enter the ‘5th Wave’, we’re seeing a new era of leading brands competing on excellence. Key players are sharpening their focus on customer experience to stay ahead of rivals. If leading coffee shops can do this successfully, the market will remain strong – it’s time for the industry to dig deep and capitalise on the opportunities ahead.”
We get a lot of queries here from people who say they are opening a coffee shop. The barriers to entry are low compared to other industries with location being of prime importance. Having an appealing range of goods, hand made cakes not frozen, great coffee and exceptional coffee seem to be the ingredients needed to hold your own again the deep pockets of the larger chains. But it goes to show that David can beat Goliath