Now in its 25th year, World Coffee Portal’s Project Café UK 2025 report shows the £6.1bn UK branded coffee shop market grew 5.2% over the last 12 months to reach 11,456 outlets. In a highly competitive trading environment, many operators are focusing on value for money to attract price-conscious consumers who now have more coffee shop choices than ever before
Twenty-five years since Allegra published its first branded coffee shop market report, UK coffee and café culture continues to thrive, inspire consumers and present new business opportunities for operators. World Coffee Portal’s annual survey of over 50,000 UK coffee shop consumers shows that the proportion making multiple coffee shop visits per week has increased from 56% to 60% over the last 12 months, marking a recovery from the height of the cost-of-living crisis.
Early morning coffee shop activity increased from 22% to 24% amid a rise in commuter footfall as more workers returned to offices. Meanwhile, average coffee shop spend has risen 5% to £6.23, bringing it back above 2023 levels following last year’s unprecedented decline. In total, 119 UK-based coffee chains increased their store footprint over the last 12 months, while 40 businesses saw net store closures.
Major UK operators strengthen value offer for price-conscious consumers
World Coffee Portal’s annual survey of UK industry leaders shows price consciousness is now perceived as the most important consumer trend in the UK branded coffee shop market, overtaking the growth of independent coffee shops. With the average price of a regular latte rising 5% to reach £3.64 over the last 12 months, many major coffee chains, including Costa Coffee, Greggs and Tim Hortons, have adjusted loyalty schemes to reduce spending thresholds for redeeming rewards, or have broadened perks to include free or discounted menu items.
Further demonstrating that market-wide price increases have unsettled previously loyal consumers motivated by routine, Starbucks has frozen beverage prices over the last year, Ole & Steen has introduced a pastry of the week for a set £2, while coffee and food-to-go chains Leon and Yolk have introduced value-focused subscriptions to compete with Pret A Manger’s Club Pret.
Specialty coffee, drive-thru and non-specialists operators gain ground
The UK branded coffee shop market has never been more competitive, with a host of boutique branded chains, a strong independent segment and value-driven non-specialist operators vying for market share. In the specialty segment, WatchHouse, EL&N, Black Sheep Coffee and BEAR have all raised investment over the last 12 months to open more UK stores.
The UK drive-thru coffee segment also continues to grow, adding 51 stores over the last 12 months to reach 855 sites. UK drive-thru coffee market leader, Costa Coffee added 27 sites to reach 373 over the last year, with Starbucks, Greggs and Caffè Nero also investing in the format.
Meanwhile, non-specialist operators with premium coffee offers, such as McDonald’s, JD Wetherspoon and major supermarkets, continue to ramp up competition with established branded coffee chains, particularly on value.
Lauded for their reduced environmental impact and promoted health benefits, plant-based dairy alternatives are now widespread in the UK branded coffee shop market, with major chains, such as Costa Coffee, Starbucks and Pret all removing non-dairy surcharges in recent years, and 73% of UK consumers surveyed believing that dairy alternatives should carry no additional cost.
Project Café UK 2025 shows oat remains the favourite non-dairy beverage pairing among UK coffee consumers. However, with many consumers re-evaluating the health benefits of these products, all plant-based dairy alternatives saw a year-on-year decline in popularity, with semi-skimmed and whole milk gaining favour over the last year.
UK operators cautious over short-term headwinds but remain optimistic for growth
UK operators continue to voice concern over high operational costs, including record-high green coffee prices, greater wage and taxation burdens and persistently high energy costs. 71% of operators reported positive sales growth over the last 12 months, a 7% year-on-year decline.
Nevertheless, despite short-term apprehension, there is long-term optimism for a broader economic recovery and further branded chain expansion, with 62% of UK industry leaders surveyed forecasting near-term growth prospects as positive.
World Coffee Portal forecasts the total UK branded coffee shop market will exceed 11,800 outlets by January 2026 and more than 13,200 by January 2030 at five-year outlet growth of 3.0% CAGR. Sales are expected to exceed £8bn over the same period, representing five-year growth of 5.7% CAGR.
Commenting on the findings of Project Café UK 2025, Allegra Group Founder and CEO, Jeffrey Young said: “The UK coffee shop market continues to be resilient, even in very difficult economic times as consumers face significant cost pressures and disposable income is limited. Coffee remains a relatively small-spend purchase and one that UK consumers value highly as a treat, an opportunity to socialise and a moment of human connection.
“We’re now seeing an emerging trend of boutique coffee operators scaling up alongside drive-thru and smaller stores offering new ways to enjoy the UK’s vibrant coffee culture. We expect the UK branded coffee shop market to continue its growth journey over the next 3-5 years.”
