Table of Contents
Introduction
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- Definition
- Abbreviations
Executive Summary
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- The market
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- Figure 1: Coffee shop market size and forecast, 2006-16
- Market factors
- Companies, brands and innovation
- Companies
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- Figure 2: Outlet numbers of coffee shops, 2010 and 2011
- Innovation
- The consumer
- Who buys coffee out of home and where do they go?
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- Figure 3: Out-of-home hot drink purchasing behaviour, either sit-in or takeaway, December 2011
- How have out-of-home coffee habits changed?
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- Figure 4: Out-of-home coffee/tea/hot drink habits, by frequency and expenditure, December 2011
- Attitudes towards coffee out of home
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- Figure 5: Attitudes towards coffee/tea/hot drinks out of home, December 2011
- Coffee shops’ menu enticements
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- Figure 6: Coffee shops’ menu enticements, December 2011
- What we think
Issue in the Market
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- How can coffee shops reassert their position in the face of rising non-specialist competitors?
- What can coffee shops learn from the rest of the eating out market?
- What can coffee shops learn from trends in the retail environment to encourage interest in tea?
- How much potential is there for coffee shops to tap into the healthy eating trend?
Future Opportunities
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- Competition from non-specialists makes tackling queuing increasingly pertinent
- Innovative strategies for regaining lost loyalty
Internal Market Environment
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- Key points
- A mature marketplace
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- Figure 7: Frequency of using instant coffee, 2010 and 2011
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- Figure 8: Frequency of using tea, 2010 and 2011
- Cost bases continue to increase
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- Figure 9: Retail price indices for coffee and other hot drinks, 2006-11
- Ethical considerations and the coffee market firmly entwined
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- Figure 10: Attitudes towards ethical concerns, by coffee shop usage, 2011
- Opportunity for coffee shops to tap into healthy eating trends more comprehensively
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- Figure 11: Consumer demand for display of calorie content on restaurant menus, June 2010-December 2011
Broader Market Environment
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- Key points
- 2012: tough market conditions but opportunities too
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- Figure 12: GfK NOP Consumer Confidence Index, monthly, January 2007-December 2011
- ‘Austerity fatigue’: pros and cons
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- Figure 13: Consumer spending priorities (after bills), December 2009-December 2011
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- Figure 14: Consumer behaviour trends, ‘I treat myself to more premium foods, instead of eating out’, January 2009-December 2011
- Britain’s ageing population
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- Figure 15: Trends in the age structure of the UK population, 2006-16
- Figure 16: Forecast adult population trends, by lifestage, 2006-16
Competitive Context – In-Home Hot Drinks
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- Key points
- In-home coffee options used as well as, not instead of, out-of-home coffee shops
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- Figure 17: Ownership trends of filter coffeemakers/cafetières and espresso machines, 2007-11
- Mintel Inspire trend Guiding Choice
Competitive Context – Out of Home
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- Key points
- Blurring boundaries between categories
- Selected non-specialist competitors
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- Figure 18: Selected competitors to specialist coffee shop operators, by outlet numbers, 2012
- Greggs
- McDonald’s
- Patisserie Valerie
- Krispy Kreme
- Pret A Manger
Strengths and Weaknesses in the Market
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- Strengths
- Weaknesses
Who’s Innovating?
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- Key points
- Widening distribution channels as operators chase footfall
- The opportunities and pitfalls of loyalty cards
- Design wars
- Providing additional reasons to visit
- Product launches
Market Size and Forecast
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- Key points
- Stronger performance in 2011, but it’s not all plain sailing for the coffee shop market
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- Figure 19: Market size and forecast of coffee shops, at current and 2011 prices, 2006-16
- Forecast
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- Figure 20: Coffee shop market size and forecast, 2006-16
- Forecast methodology
Market Share
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- Key points
- Costa Coffee dominates the market
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- Figure 21: Outlet numbers of coffee shops, 2010 and 2011
Companies and Products – Coffee Shops
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- Key points
- Specialist coffee shop operators
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- Figure 22: Outlet numbers of selected specialist coffee chains, 2011
- Costa Coffee
- Financial performance
- Recent developments
- Starbucks
- Financial performance
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- Figure 23: Financial performance of Starbucks Coffee Limited UK, 2009 and 2010
- Recent developments – stores
- Recent developments – food and drink
- Recent developments – other
- Caffè Nero
- Financial performance
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- Figure 24: Financial performance of Caffè Nero Group Limited, 2010 and 2011
- Recent developments
- Coffee Republic
- Recent developments
Brand Communication and Promotion
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- Key points
- Operators vie for market share from non-specialists as well as each other
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- Figure 25: Advertising expenditure on selected coffee shop brands, 2007-11
- Figure 26: Advertising expenditure on selected coffee shop brands, by media type, 2011
- Coffee shop websites are largely lacklustre
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- Figure 27: Average daily visitors at sites of selected coffee shop brands, January 2009-December 2011
How Often Do People Use Coffee Shops?
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- Key points
- Specialist coffee shops: Visiting habits
- Usage drops marginally in 2011
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- Figure 28: Frequency of visiting coffee shops, 2007-11
- Convenience-driven and time-pressed consumers push up takeaway usage
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- Figure 29: Coffee shop usage, sit-in and takeaway, 2007-11
Who Buys Coffee Out of home and Where Do They Go?
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- Key points
- Non-specialists are competing on interiors/environments now, not just price
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- Figure 30: Out-of-home hot drink purchasing behaviour, either sit-in or takeaway, December 2011
- Convenience drives out-of-home hot drinks purchasing behaviour, not brand loyalty
- Trend towards takeaways
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- Figure 31: Out-of-home hot drink purchasing behaviour – sit-in vs takeaway, December 2011
How Have Out-of-Home Coffee Habits Changed?
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- Key points
- A quarter of users have been cutting back
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- Figure 32: Out-of-home coffee/tea/hot drink habits, by frequency and expenditure, December 2011
- Creating a buzz to engage with younger consumers
- Balancing concepts of value
Attitudes Towards Coffee Out of home
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- Key points
- Consumer retention damaged by lack of brand differentiation
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- Figure 33: Attitudes towards coffee/tea/hot drinks out of home, December 2011
- Fast pace of coffee shops deters older consumers
- Guiding choice
- Lack of loyalty in the coffee shop market
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- Figure 34: Attitudes towards coffee/tea/hot drinks out of home, by any agree and strongly agree, December 2011
- Limited demand for better serving options
Coffee Shops’ Menu Enticements
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- Key points
- Consumers remain value-led
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- Figure 35: Coffee shops’ menu enticements, December 2011
- Men don’t ask for directions or read maps
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- Figure 36: Coffee shops’ menu enticements, by any interest and very interested, December 2011
- How to provide more food whilst still being a coffee shop
- Afternoon teas – capitalising on the ‘Britishness’ of 2012
- Regularly changing specials – consumers looking for additional reasons to purchase
- Appealing to yummy mummies
- Limited appeal of tea variants
Coffee Shops – Targeting Opportunities
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- Key points
- Target groups
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- Figure 37: Coffee shop target groups, December 2011
- Apathetic
- Quality-Driven
- Adventurous Drinkers
- Fuss-Free
- Undetermined
Appendix – How Often Do People Use Coffee Shops?
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- Figure 38: Frequency of visiting coffee shops, by detailed demographics, 2011
- Figure 39: Sit-in or takeaway visits to coffee shops, by detailed demographics, 2011
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Appendix: Who Uses Coffee Shops and Where Do They Go?
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- Figure 40: Out-of-home hot drink purchasing behaviour, by venue, December 2011
- Figure 41: Most popular out-of-home hot drink purchasing behaviour (drink in), by detailed demographics, December 2011
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- Figure 42: Next most popular out-of-home hot drink purchasing behaviour (drink in), by detailed demographics, December 2011
- Figure 43: Most popular out-of-home hot drink purchasing behaviour (takeaway), by detailed demographics, December 2011
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- Figure 44: Next most popular out-of-home hot drink purchasing behaviour (takeaway), by detailed demographics, December 2011
- Figure 45: Out-of-home hot drink purchasing behaviour (lapsed/non-users), by detailed demographics, December 2011
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Appendix – How Have Out-of-home Coffee Habits Changed?
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- Figure 46: Out-of-home coffee purchasing behaviour, December 2011
- Figure 47: The number of times tea/coffee/other hot drinks bought out of home, by detailed demographics, December 2011
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- Figure 48: The amount of money I spend on buying tea/coffee/other hot drinks out of home, by detailed demographics, December 2011
- Figure 49: Drinking in out-of-home coffee purchasing behaviour, by most popular coffee shops visited, December 2011
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- Figure 50: Drinking in out-of-home coffee purchasing behaviour, by next most popular coffee shops visited, December 2011
- Figure 51: Takeaway from out-of-home coffee purchasing behaviour, by most popular coffee shops visited, December 2011
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- Figure 52: Takeaway from out-of-home coffee purchasing behaviour, by next most popular coffee shops visited, December 2011
- Figure 53: Out-of-home coffee purchasing behaviour, by financial situation, December 2011
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- Figure 54: Out-of-home coffee purchasing behaviour, by anticipations about next year financial situation, December 2011
- Figure 55: Where do you choose to spend your extra money, by the number of times tea/coffee/other hot drinks bought out of home, December 2011
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- Figure 56: Where do you choose to spend your extra money, by the amount of money spent on buying tea/coffee/other hot drinks out of home, December 2011
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Appendix – Attitudes towards Coffee Out of Home
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- Figure 57: Attitudes towards coffee out of home, December 2011
- Figure 58: Agreement with the statements ‘I’m not very adventurous when it comes to ordering different drinks’ and ‘I don’t tend to choose anything new/different, because it’s not always clear what the other drinks are’, by detailed demographics, December 2011
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- Figure 59: Agreement with the statements ‘I know what I like and am not interested in trying anything new’ and ‘I like to choose something different from what I tend to drink at home’, by detailed demographics, December 2011
- Figure 60: Agreement with the statements ‘Quality is most important to me when choosing where to buy tea/coffee, etc out of home’ and ‘I just like to order my coffee/hot drink with the minimum of fuss’, by detailed demographics, December 2011
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- Figure 61: Agreement with the statements ‘Convenient location is more important than brand of coffee chain’ and ‘When available I will often order seasonal drinks’, by detailed demographics, December 2011
- Figure 62: Agreement with the statements ‘I don't like the mugs/cups etc that tea/coffee out of home are served in’ and ‘I usually choose the cheapest place for tea/coffee etc out of home’, by detailed demographics, December 2011
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- Figure 63: Agreement with the statements ‘I tend to pick the place with the shortest queues’ and ‘I have a favourite brand which I will always use/visit where available out of home’, by detailed demographics, December 2011
- Figure 64: Drinking in any agreement with attitudes towards coffee out of home, by most popular coffee shops visited, December 2011
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- Figure 65: Drinking in any agreement with attitudes towards coffee out of home, by next most popular coffee shops visited, December 2011
- Figure 66: Takeaway from any agreement with attitudes towards coffee out of home, by most popular coffee shops visited, December 2011
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- Figure 67: Takeaway from any agreement with attitudes towards coffee out of home, by next most popular coffee shops visited, December 2011
- Figure 68: Agreement with attitudes towards coffee out of home, by most popular any agreement with attitudes towards coffee out of home, December 2011
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- Figure 69: Agreement with attitudes towards coffee out of home, by next most popular any agreement with attitudes towards coffee out of home, December 2011
- Figure 70: Agreement with attitudes towards coffee out of home, by other any agreement with attitudes towards coffee out of home, December 2011
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- Figure 71: Agreement with attitudes towards coffee out of home, by the number of times tea/coffee/other hot drinks bought out of home, December 2011
- Figure 72: Agreement with attitudes towards coffee out of home, by the amount of money spent on buying tea/coffee/other hot drinks out of home, December 2011
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Appendix – Coffee Shops’ Menu Enticements
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- Figure 73: Coffee shops’ menu enticements, December 2011
- Figure 74: Lower-calorie drinks available on coffee shops’ menus, by detailed demographics, December 2011
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- Figure 75: Lower-caffeinated drinks/decaffeinated drinks available on coffee shops’ menus, by detailed demographics, December 2011
- Figure 76: Herbal/fruit teas available on coffee shops’ menus, by detailed demographics, December 2011
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- Figure 77: Speciality teas available on coffee shops’ menus, by detailed demographics, December 2011
- Figure 78: Better descriptions of what drinks are in coffee shops, by detailed demographics, December 2011
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- Figure 79: Fruit juices/smoothies available on coffee shops’ menus, by detailed demographics, December 2011
- Figure 80: More general information on drinks on coffee shops’ menus, by detailed demographics, December 2011
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- Figure 81: Meal deals (drink and food item for one price) available on coffee shops’ menus, by detailed demographics, December 2011
- Figure 82: Smaller drink/cup sizes on coffee shops’ menus, by detailed demographics, December 2011
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- Figure 83: Range of regularly changing specials on coffee shops’ menus, by detailed demographics, December 2011
- Figure 84: Afternoon tea available on coffee shops’ menus, by detailed demographics, December 2011
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- Figure 85: Wider variety of food available on coffee shops’ menus, by detailed demographics, December 2011
- Figure 86: Any interest in the coffee shops’ menu enticements, by most popular coffee shops visited (drink in), December 2011
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- Figure 87: Any interest in the coffee shops’ menu enticements, by next most popular coffee shops visited (drink in), December 2011
- Figure 88: Any interest in the coffee shops’ menu enticements, by most popular coffee shops visited (takeaway), December 2011
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- Figure 89: Any interest in the coffee shops’ menu enticements, by next most popular coffee shops visited (takeaway), December 2011
- Figure 90: Any interest in the coffee shops’ menu enticements, by change in the number of times tea/coffee/other hot drinks bought out of home, December 2011
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- Figure 91: Any interest in the coffee shops’ menu enticements, by change in the amount of money spent on buying tea/coffee/other hot drinks out of home, December 2011
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Appendix – Coffee Shops – Targeting Opportunities
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- Figure 92: Target groups, by detailed demographics, December 2011
- Figure 93: Attitudes towards coffee out of home, by target groups, December 2011
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