UK Coffee shop Market Overview

UK Coffee shop Market Overview

Do you want to open your own coffee shop in the UK but have no idea of what is going on in the UK Coffee shop market? Do you have a coffee shop and want to boost coffee sales? Don’t worry. This post will give you a broad image of what is going on in the market and will help you impress your investors and take your first steps more confidently.

Before starting your own coffee shop, you should know a detailed description of the potential market or customer groups that you feel your idea could be sold to. You should find out as much as possible about the potential market size and the behavior of the market (is it growing, static or likely to change soon).

UK Market Overview

Within the UK over the past three years, there has been a surge in the demand for coffee known by some as the ‘Coffee Boom’ with branded coffee shop sales recently reaching an all-time high of around £3 billion within the UK alone. Estimated at 20,728 outlets, the total UK coffee shop market showed significant sales growth of 10 percent in 2015, compared with 2014, and a total turnover in 2015 of £7.9 billion. Over the past five years, the market has grown by a considerable size of 28%, this market has been further predicted to grow at another rate of 26% between 2015 to 2020.

Research carried out by Mintel has gone to suggest that as many as three-quarters of people within the UK have suggested that they purchase hot drinks outside of their house. This research further suggests that 27% of those who purchase hot drinks away from home purchase them from independent coffee shops or Cafés, a further 27% of hot drink purchases took place within fast food chains, such as, McDonald’s. Finally, a small minority, being 14% of consumers, were said to have purchased coffee from restaurants, pubs, and hotels.

Furthermore, it has been suggested that age can be seen to have an impact on the likelihood of a person purchasing coffee outside of the house. Research has highlighted that those aged between 16-34 are more likely than most to buy any hot drink out-of-home with 81% of this age group doing so, compared to only 67% of those people aged 65 and over. Though it has been found that those purchasing coffee between the ages of 45-64 is much more likely to choose a coffee based on quality, this being the case for around 60% of this age group. Whereas, only 50% of the age group 16-34 suggested that their coffee purchasing habits are based upon quality.

Due to this increase in demand for coffee, coffee shops are consequently also seeing rapid increases in demand. More recently this demand is coming in the form of non-coffee specialists, often being businesses that are in the pub, restaurant and hotel market. They also face increased competition from smaller specialists, often at the forefront of innovation, which is attracting funding for expansion. Due to coffee drinkers seeking a more unique, artisanal, high quality ‘third wave’ experience independent stores are representing considerable competition towards specialist coffee shop brands. Independent stores are further beginning to explore new revenue streams through the trailing of such products as alcohol, events and creating partners with other stores or brands.