Tesco is targeting the high street coffee bar market with a major roll-out of Coffee Nation’s self-service gourmet coffee units.
The concessions have already been installed in 30 Tesco Express stores and the multiple aims to roll them out to 150 by March, advertising their presence with instore signage and banners outside shops.
Trials will also be run in Tesco Metro during the next few months, with a substantial roll-out planned for the format if it is successful.
Tesco senior buying manager Tracy Parker said: “Gourmet coffee to go is an exciting market which is growing rapidly. Customers tell us they like the convenience, quality and price
of the coffee. It also gives us the confidence so we can broaden our customer offering.”
Martin Dawes, Coffee Nation’s chief executive, said: “Discussions with Tesco began in April 2002. They were impressed by the concept and our willingness to work closely with them on productivity analysis.” Now, independent market research commissioned by Tesco had shown that Coffee Nation stations’ coffee was sold at 25% less than at the major high street coffee bars, he said.
The concept was also proving to be a significant footfall driver, with many customers claiming to have visited the store because of the concessions.
And 80% of those buying a coffee from the units bought other products as well.
“Tesco’s research shows the units are driving up average cross-category spend in Tesco Express stores, with a particularly positive influence on bakery sales,” said Dawes.
“It now wants to use them to capture 10% of the high street coffee bar market in three years.” Dawes added that he intended to build on the deal with Tesco by targeting other convenience and forecourt operators.
The machines serve capuccino, espresso, café latté, Americano and hot chocolate in regular and large sizes, priced at £1.30 and £1.60.
Coffee cups are barcoded and customers pay for their drink at the checkout.
The units are regularly refilled with fresh coffee and milk by store staff and are subject to a regular, audited maintenance programme.
Built-in technology automatically alerts head office to faults, with same-day call-out for repairs where possible. Retailers’ queries are handled by a 24-hour help line.
Rod Addy
The concessions have already been installed in 30 Tesco Express stores and the multiple aims to roll them out to 150 by March, advertising their presence with instore signage and banners outside shops.
Trials will also be run in Tesco Metro during the next few months, with a substantial roll-out planned for the format if it is successful.
Tesco senior buying manager Tracy Parker said: “Gourmet coffee to go is an exciting market which is growing rapidly. Customers tell us they like the convenience, quality and price
of the coffee. It also gives us the confidence so we can broaden our customer offering.”
Martin Dawes, Coffee Nation’s chief executive, said: “Discussions with Tesco began in April 2002. They were impressed by the concept and our willingness to work closely with them on productivity analysis.” Now, independent market research commissioned by Tesco had shown that Coffee Nation stations’ coffee was sold at 25% less than at the major high street coffee bars, he said.
The concept was also proving to be a significant footfall driver, with many customers claiming to have visited the store because of the concessions.
And 80% of those buying a coffee from the units bought other products as well.
“Tesco’s research shows the units are driving up average cross-category spend in Tesco Express stores, with a particularly positive influence on bakery sales,” said Dawes.
“It now wants to use them to capture 10% of the high street coffee bar market in three years.” Dawes added that he intended to build on the deal with Tesco by targeting other convenience and forecourt operators.
The machines serve capuccino, espresso, café latté, Americano and hot chocolate in regular and large sizes, priced at £1.30 and £1.60.
Coffee cups are barcoded and customers pay for their drink at the checkout.
The units are regularly refilled with fresh coffee and milk by store staff and are subject to a regular, audited maintenance programme.
Built-in technology automatically alerts head office to faults, with same-day call-out for repairs where possible. Retailers’ queries are handled by a 24-hour help line.
Rod Addy
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