Challenging times ahead for branded coffee chains, says report

16 July 2009 by
Challenging times ahead for branded coffee chains, says report

The collapse of Coffee Republic has hailed the start of a challenging time for the branded coffee chain market, a report has warned.

The study, by market analysts Key Note, found that the branded coffee chain sector has come under intense competition as consumers decrease their average spend in coffee shops and make fewer visits.

Based on a survey of 1,000 consumers and analysis of the UK and Ireland's major branded coffee and sandwich shops, the report found that 42% of respondents would be less likely to visit a branded store in the future as a direct result of the recession.

While 42% of respondents said they had visited a branded coffee shop in the last three months, 30% said they had visited these outlets less often than in the three months prior to the survey.

Only a fifth said they would choose a branded store over an independent one.

The report predicts that the effect of the recession, at least initially, will be to slow down the number of new openings by the larger chain operators.

"The recent strong growth in outlet numbers is thus forecast to fall significantly over the next five years, during a recession that could affect the market until 2012," the report warned.

"Profitability can also be expected to fall as operators are forced to offer lower prices in order to retain cost-conscious customers."

Administrators hope to sell Coffee Republic >>

Coffee Republic suspends shares ready for administration >>

Coffee shops still bucking economic trend >>

Starbucks blames UK for flat international sales >>

By Kerstin Kühn

E-mail your comments to Kerstin Kühn here. jobs
Looking for a new job? Find your next restaurant job here with jobs

Blogs on]( Catch up with more news and gossip on all Caterer's blogs
[Newsletters For the latest hospitality news, sign up for our e-mail newsletters.
The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.


Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking