Allegra reveals UK coffee market robust despite Brexit uncertainty

The £9.6bn UK coffee shop market grew by 7.3% in turnover during 2017, making it one of the UK’s strongest performing sectors.

Project Café2018 UK, the new report from Allegra World Coffee Portal, reveals that the total UK coffee shop market added 1,215 stores over the last 12 months to reach 24,061, representing 5.3% growth.

The industry mood remained confident in 2017, with 71% of coffee sector executives interviewed by Allegra positive about the trading environment.

However, deep concerns over key Brexit issues, such as trade and jobs, remain – a climate reflected in dampened like-for-like sales and impeded outlet growth.

A lack of clarity over the UK’s future relationship with the EU is a headwind for the industry, but while the fall in sterling has led to higher equipment and import costs, increased tourism and the popularity of ‘staycations’ has boosted sales for some.

Branded Chains Deliver 10.5% Sales Growth to Record £4bn

Costa Coffee, Starbucks Coffee Company and Caffè Nero continue to dominate the UK coffee shop market, with 2,326, 956 and 675 outlets respectively. Together, the UK’s top three coffee chains comprise a 52.9% share of the total branded chain market.

By far still the largest branded chain in the UK, Costa Coffee has been voted the ‘Nation’s Favourite’ coffee shop for the eighth year in a row by Allegra’s independent panel of consumers.

Jason Cotta, MD for Costa UK & Ireland said: “We’re absolutely delighted to be recognised as the UK’s favourite coffee shop for the eighth consecutive year. This fantastic achievement wouldn’t have been possible without the support and dedication we receive from our partners and baristas.”

Allegra anticipates the total UK coffee shop market will exceed 31,400 outlets, with a turnover of £13bn by 2022.

Allegra Group CEO, Jeffrey Young, commented on the report’s findings: “The UK coffee shop market continues to be robust despite current challenges, laying down modest growth in 2017 amid severe concern over the Brexit impact on jobs and investment.

As the market matures and we enter the ‘5th Wave’, we’re seeing a new era of leading brands competing on excellence. Key players are sharpening their focus on customer experience to stay ahead of rivals. If leading coffee shops can do this successfully, the market will remain strong – it’s time for the industry to dig deep and capitalise on the opportunities ahead.”
 

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