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New consumers
The sales growth is being underpinned this year by widening consumer participation and further embedding of coffee culture into UK lifestyles. With limited price increases by major chains, industry like-for-like sales growth of 3.5% has been achieved by new consumers enjoying coffee houses, better operating standards and menu innovation.
UK consumers are clearly embracing the growing coffee culture trend and demonstrating their love of coffee, enabling the sector to substantially outperform the wider retail market, which in contrast, has grown at a sluggish pace of 1-2% over the past 4-5 years.
Jeffrey Young, Managing Director, Allegra Strategies said:
“The UK coffee shop market continues to astound even the most optimistic of forecasters, by growing significantly in value, in outlet numbers and also in the social psyche of the nation. As consumers gain more opportunity to consume quality coffee through more outlets, they are making it part of their lifestyle. Britain has become a ‘new nation of coffee drinkers’. Long live the cup of tea, but more and more consumers seek and enjoy quality coffee.”
“High quality ‘artisan’ independent coffee shops are also fuelling consumer demand and driving the branded coffee shop sector to increase focus on authentic interiors, barista technique and to introduce a wider range of crafted coffees such as flat white and cortado.”
“This focus on quality in all areas can only continue to drive a thriving industry over the next 3-5 years and beyond. The entry of Tesco into the market this year with its Harris + Hoole joint venture signals a new era of competition is about to emerge, with quite possibly further M&A activity.”

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