Billions £99 Jun 2017 16:08
Estimated at 22,845 outlets, the total UK coffee shop market[1] delivered a growth of 6% in outlets and 12% in turnover to reach £8.9 billion in 2016.
Costa Coffee, Starbucks Coffee Company, andCaffè Nero remain the UK’s leading chains with a 53% outlet share of the branded coffee shop market. Market leader Costa operates 2,121 UK outlets, adding 129 units in 2016, and Starbucks and Caffè Nero operate 898 and 650 UK outlets respectively. For the 7th year in a row, Costa has been voted the nation’s favourite coffee shop chain by Allegra’s independent panel of 5,000 consumers, ahead of Starbucks and Caffè Nero. However, Starbucks has seen a notable rise in popularity in 2016.
Changing market dynamics and the emergence of The 5th Wave
Leading chains continue to expand and enjoy positive like-for-like sales growth, albeit at a slowing pace. However, according to Allegra, small and medium sized boutique chains such asCoffee#1, Joe & the Juice, and Taylor St. Baristasare gaining momentum and driving the comparable sales growth across the sector, ahead of the leading chains.
Increased merger and acquisition activity throughout 2016 signifies the strength of the vibrant coffee shop market in the UK. Activity such as Whitbread’s 49% acquisition of Pure, Tchibo’s acquisition of Matthew Algie, and Caffè Nero’s purchase of Harris+Hoole signals further market convergence.