Supermarkets helped to fuel the growth of the coffee shop market in 2015, adding a further 322 outlets, according to the Allegra World Coffee Portal’s Project Cafe 2016 UK report.
The growth was driven mainly by Morrisons adding a further 270 cafés to reach 398, second to Tesco with 481 coffee shops and cafés, the report reveals.
Overall, the UK coffee shop market continued to outperform the retail sector, with sales growth of 10% on 2014.
The market was estimated to have 20,728 outlets with a total turnover in 2015 of £7.9bn. Allegra has predicted further growth, with the market exceeding 30,000 outlets and £15bn turnover by 2025.
The branded coffee chain segment recorded £3.3bn turnover across 6,495 outlets, following outlet growth of 12%, adding 714 stores during 2015 and delivering sales growth of 15%. Costa was at the forefront, adding 171 UK outlets with a sales growth of 14% in 2015.
Costa Coffee (1,992 outlets), Starbucks Coffee Company (849) and Caffè Nero (620) remain the UK’s leading brands with 53% share of the branded chain market.
The report claims that coffee quality is now expected across the sector due to the influence of both artisan chains and independents. In Allegra’s survey of over 16,000 consumers, Tesco-owned artisan chain Harris + Hoole was ranked number one for coffee quality.
Allegra said the gradual decline of instant coffee consumption at home and the subsequent premiumisation of the at-home segment have further increased the availability of speciality coffee. Consumers are becoming increasingly knowledgeable about coffee and brewing at home is on the rise, with 7% of consumers now having a range of home barista equipment compared with 2% in 2014.
There was also a greater commitment to coffee credentials by the non-specialist sector including supermarkets, retail stores, fast food outlets and pubs, said the report. This sector experienced outlet growth of 10.5%, reaching 7,976 establishments with a strong coffee offering (excluding branded chain partnerships). This sector took a further 2% share of the market and now represents 39% of the total coffee shop market, compared with the branded chains with 31% share and the independents with 30% share.
During 2015 coffee shop visitors also increased their daily visits, with 16% frequenting a coffee shop at least once a day compared with 14% in 2014.
“The strong market growth of the past 12 months has exceeded our own estimates,” said Allegra MD Jeffrey Young. “This provides further evidence of the growing importance of coffee shops to the British economy and, more importantly, their impact on the daily lives of everyday consumers. With a market now valued at £7.9bn, no one can ignore the fact coffee is big business.”
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