Over 95 million cups of coffee are drunk in the UK every day, according to the British Coffee Association. From single-serve pods for at-home consumption to takeaway, instagrammable iced drinks - coffee is a big part of British culture and lifestyle.
It’s nearly impossible to find a city in the UK without an international coffee shop chain or independent café. Coffee shops are a place where people go to “socialise, spread news and share new ideas”.
While the UK coffee shop industry faces a period of deep uncertainty, it’s expected to recover in about three years’ time.
Coffee Shop Industry Overview
Data from 2019 shows there were approximately 25,000 coffee shop outlets in the UK. This comprises independent operators, branded chains and non-specialist operators, i.e. non-traditional vendors like pubs and restaurants where coffee is sold.
In 2019, independent operators accounted for about 27% of coffee shops in the UK, while branded chains accounted for approximately 32%, according to Statista’s data. Non-specialist operators accounted for about 41% of coffee outlets, which equates to 10,604 venues.
The growth of non-traditional competitors is predicted to constrain expansion of coffee shops as they present a viable alternative for consumers, according to IBISWorld.
As of February 2021, London had 2,330 branded coffee shops, accounting for more than a quarter of branded coffee shops in the UK.
The Impact of Covid-19 on the Coffee Shop Industry
The F&B industry has faced unprecedented challenges due to the covid-19 pandemic. The coffee sector, in particular, has suffered a 40% decline in sales in 2020.
IBISWorld predicts that, in the short term, the possibility of continued restrictions together with damaged finances and lower consumer confidence will keep impacting spending. Once the economy recovers, this is expected to improve.
World Coffee Portal forecasts there will be “a modest return to outlet growth in 2022”, while a full return to pre-pandemic levels will take at least three years.
From social distancing to increased safety measures, the pandemic has affected in-house coffee drinking. This has led businesses to adapt - takeaway, drive-thru and delivery have grown in popularity and industry digitalisation has accelerated, as reported by Statista. Euromonitor reports that cafés have increasingly invested in products for off-trade home consumption, catering to new routines and habits.
Coffee Shops: Key Trends
Esquires Coffee highlights numerous trends for 2022 (and beyond), including the emergence of coffee subscription boxes and services and the introduction of milk alternatives. It also emphasises the growing importance of becoming more environmentally and socially responsible to remain aligned with consumer values.
When it comes to new coffee drinks - snapchilled, buttered and dalgona coffee are expected to grow in popularity, influenced by scientific developments, celebrities and TikTok, respectively.
Unsurprisingly, safety is expected to remain a key priority for food and beverage enterprises. It’s vital that businesses keep upholding the highest standards of safety to keep customers and employees protected.
Most Popular Coffee Shops in the UK
According to IBISWorld, the companies which hold the largest market shares in the industry in 2021 include Costa, Pret A Manger, Nero and Starbucks.
With over 2,000 outlets in the UK, Costa is the undisputed market leader. Did you know? Costa was acquired by Coca Cola in 2019 and is the world’s second largest coffee shop chain (just behind Starbucks).
Planning to Open a Café?
According to Allegra Group Founder and CEO Jeffrey Young, recovery in the UK coffee shop industry “will require significant innovation, discipline and leadership, with successful operators adapting to on-going trading challenges with smart, technology-led solutions and new store formats.“ If you’re thinking about opening a coffee shop, make sure to keep this in mind.
First things first, you’ll need to establish a unique selling proposition for your business. Start by thinking about what competitors are doing and what you could do better or differently. This could encompass pricing strategies, location, atmosphere or even decoration. The Companies House has published a great article on how to start a coffee shop here.
When it comes to legal requirements, you’ll need to make sure your company is properly registered. You’ll also need to consider food safety. By law, you must have a Food Safety Management System in place.
Have You Heard of Hubl?
Hubl is a hospitality checklist app which gives you one less thing to worry about when it comes to running a successful coffee shop. Designed by food safety professionals, Hubl’s main features include a dashboard, checklists which cover key activities, temperature and delivery logs, and more. The app replaces your food hygiene diary, your allergen matrix, and more. Contact us for more information on how Hubl can help your business.
References
Coffee in the UK; British Coffee Association; Accessed May 2022
Number of coffee shops in the United Kingdom (UK) from 2009 to 2019, by type of outlet; Statista; Published by S. Lock, Feb 2021; Accessed June 2021
Cafés/Bars in the United Kingdom; Euromonitor; Feb 2021; Accessed June 2021
Covid-19 winds back seven years' sales growth for UK branded coffee shops; World Coffee Portal; Feb 2021; Accessed June 2021
How to Open a Coffee Shop; Companies House; Oct 2018; Accessed May 2022
Coffee Shop Sales Fall 40% but Big Chains Expand; Footprint; Feb 2021; Accessed June 2021
Coffee Trends for 2021; Café Direct; Accessed June 2021
10 Of The U.K.'S Favorite Coffeehouse Chains: From Costa To Caffè Nero; BBC America; Feb 2021; Accessed May 2022