The number of branded coffee bars in Britain has almost quadrupled since 1999 and they are forecast to smash the £1b-turnover barrier in 2004, according to this year's report from retail analyst Allegra Strategies.
The branded sector, which turned over £877m in 2003, is expected to expand by nearly 11% to 2,965 sites between now and December 2006. At the moment it accounts for 28% of the total coffee shop market of 8,090 outlets, up by 2.6% since 2001.
Coffee-led operations are predicted to grow by 12.7% to 2,150 outlets by 2006, while the food-led chains, such as Bakers Oven, O'Briens and Pret A Manger, are predicted to grow at a slower rate of 6% a year to 815 sites in 2006. The fastest growers in this sector were O'Briens, EAT and Benjy's.
Starbucks leads the table in the coffee-led sector, with one-quarter of the market, followed by Costa with a 20.7% slice. The fastest growers have been Starbucks (up by 4.8%) and Caffé Nero (up by 4.3%), which now occupies the number-three slot with a 10.8% market share. However, Coffee Republic has lost 5% of the market since 2001.
The shift of emphasis from London to its suburbs and to small regional towns was expected to continue. Allegra forecasts an 11.5% growth in the provincial market to December 2006, slightly more than in London.
And food is becoming more important, according to the report, with the percentage of people who regularly buy food in a coffee shop increasing from 16.2% in 2003 to 23.3% in 2004.
- Starbucks and Costa have the highest brand awareness levels (92.3% and 86.4%).
- Caffé Nero was the consumer's favourite for coffee quality, atmosphere and service.
- Pret A Manger and EAT got the biggest thumbs-up for food quality, cleanliness and location.
- The average cost of a 12oz cappuccino has risen by 1.2% in the past year to £1.71 across the top 10 coffee chains.
- For the first time in four years, lattes are now more popular than cappuccinos.
Source: Caterer & Hotelkeeper magazine, 8 July 2004