Table of Contents
Executive Summary
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- The market
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- Figure 1: UK coffee shops market size and forecast, 2009-19
- Market factors
- Companies, brands and innovation
- Companies
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- Figure 2: Outlet numbers of the three largest UK coffee shop chains, 2011 and 2013-14
- Who’s innovating?
- The consumer
- Outlets used to buy hot drinks out of home
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- Figure 3: Outlets used to buy hot drinks out of home, July 2013 and September 2014
- Frequency of using a coffee shop
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- Figure 4: Frequency of using coffee shops, September 2014
- Reasons for buying hot drinks out of home
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- Figure 5: Reasons for buying hot drinks out of home, September 2014
- Attitudes towards buying hot drinks out of home
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- Figure 6: Attitudes towards buying hot drinks out of home, September 2014
- Interest in products and services when buying coffee out of home
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- Figure 7: Interest in products and services when buying hot drinks out of home, September 2014
- Specialist coffee shops’ menu enticements
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- Figure 8: Coffee shops’ menu enticements, September 2014
- What we think
Issues and Insights
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- Diversifying selling formats offers scope for growth
- The facts
- The implications
- Operators must tap into brand personality trends to foster loyalty
- The facts
- The implications
- Scope for further menu expansion
- The facts
- The implications
- Diversifying drinks ranges could help create standout
- The facts
- The implications
Trend Application
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- Extend My Brand
- Data Creators
- Many Mes
Market Drivers
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- Key points
- In-home coffee consumption holds steady
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- Figure 9: UK household purchases of coffee and tea, 1974-2012
- Coffee prices
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- Figure 10: RPI: coffee and other hot drinks, Q1 2010-Q3 2014
- Despite momentum in the economy, income squeeze continues in 2014
- The ageing population poses a challenge to coffee shops
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- Figure 11: Trends in the age structure of the UK population, 2009-19
Strengths and Weaknesses
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- Strengths
- Weaknesses
Competitive Context
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- Key points
- In home
- The in-home coffee market
- Coffee pods
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- Figure 12: Ownership of coffee pod machines, by age, April 2014
- Flavoured coffee
- Out of home
- Competition from non-specialist operators intensifies
- Greggs
- Fast food brands
- Lunch and other snacking operators
- Pizza/pasta restaurants
- Pubs
Who’s Innovating?
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- Key points
- Food expansion: blurring boundaries between categories
- Packaging trends
- Creating standout
- Playing on Play Ethic
- ‘Green’ trends
- Globalisation issues
Market Size and Forecast
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- Key points
- Coffee shops expected to retain growth
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- Figure 13: UK coffee shops market size and forecast, at current and 2014 prices, 2009-19
- Outlet diversification continues
- Branding concerns come to the fore
- Food growth opportunities
- Forecast
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- Figure 14: UK coffee shops market size and forecast, 2009-19
- Forecast methodology
Market Share
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- Key points
- Costa Coffee remains the dominant operator
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- Figure 15: Outlet numbers of selected UK coffee shops, 2011 and 2013-14
Companies and Products
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- Key points
- Specialist coffee shop operators
- Costa Coffee
- Financial performance
- Recent developments – Stores
- Recent developments – Food and drink
- Recent developments – Other
- Starbucks
- Financial performance
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- Figure 16: Financial performance of Starbucks Coffee Limited UK, 2009-13
- Recent developments – Food and drink
- Recent developments – Other
- Caffè Nero
- Financial performance
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- Figure 17: Financial performance of Caffè Nero Group Limited, 2010-14
- Recent developments
- Coffee Republic
- Recent developments
Brand Communication and Promotion
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- Key points
- Above-the-line adspend has fallen amongst most brands bar Starbucks
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- Figure 18: Advertising expenditure on selected coffee shop brands, 2010-14
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- Figure 19: Advertising expenditure on selected coffee shop brands, by media type, 2014*
- Online and social media channels
- Driving recommendation through free gifts
- Starbucks looks to integrated media to show ‘special coffee moments’
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- Figure 20: Internet penetration, ever used, by age and gender, Q1 2011 Q1-Q1 2014
- Brands play on Play Ethic to bolster positive connotations
Brand Research
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- Brand map
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- Figure 21: Attitudes towards and usage of brands in the coffee shop sector, September 2014
- Correspondence analysis
- Brand attitudes
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- Figure 22: Attitudes, by coffee shop brand, September 2014
- Brand personality
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- Figure 23: Coffee shop brand personality – Macro image, September 2014
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- Figure 24: Coffee shop brand personality – Micro image, September 2014
- Brand experience
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- Figure 25: Coffee shop brand usage, September 2014
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- Figure 26: Satisfaction with various coffee shop brands, September 2014
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- Figure 27: Consideration of coffee shop brands, September 2014
- Brand recommendation
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- Figure 28: Recommendation of selected coffee shop brands, September 2014
The Consumer – Who Buys Coffee Out of Home and Where do They Go?
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- Key points
- Venues visited
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- Figure 29: Outlets used to buy hot drinks out of home, July 2013 and September 2014
- Competition from non-specialists
- The threat from free coffee
- One in five people don’t drink hot drinks out of home
- Frequency of visiting coffee shops
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- Figure 30: Frequency of using coffee shops, July 2013 and September 2014
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- Figure 31: Frequency of using coffee shops, September 2014
The Consumer – Reasons for Buying Coffee Out of Home
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- Key points
- Reasons for buying hot drinks out of home
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- Figure 32: Reasons for buying hot drinks out of home, September 2014
- Two in five turn to hot drinks for a break, equal share to relax
- Convenience drives one in four hot drink buyers
- Self-service machines
- Ready-to-drink products
- Vending opportunities
- Coffee karts
- Slow it all down
- Coffee in the meal context
The Consumer – Attitudes towards Buying Coffee Out of Home
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- Key points
- More than a quarter like to vary where they go for coffee
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- Figure 33: Attitudes towards buying hot drinks out of home, September 2014
- Standout products
- Highlighting the venues’ coffee credentials
The Consumer – Interest in Products and Services When Buying Coffee Out of Home
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- Key points
- Wider service formats appeal most to the 16-34s
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- Figure 34: Interest in products and services when buying hot drinks out of home, September 2014
- Tailored service formats
- Drive-throughs and self-service machines
- Mobile units
- Smartphone technology
- Digital loyalty schemes, promotions and payment apps
- Smartphone payments
- Location-based marketing
- ‘Push’ marketing
- In-store wireless charging
- Video content can help promote new services
The Consumer – Specialist Coffee Shops’ Menu Enticements
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- Key points
- Menu enticements
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- Figure 35: Coffee shops’ menu enticements, September 2014
- Localism
- Food expansion opportunities
- Hot sandwiches
- Wider product categories
- Wider menus linked to trials of other meal occasions
- Drinks expansion opportunities
- Soft drinks
- Dessert coffees
- Tea innovation
Appendix – Market Size and Forecast
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- Figure 36: Best- and worst-case forecasts for UK coffee shops market, 2014-19
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