UK coffee shop market sees turnover growth of 7.9% in 2018, study says
The economic turbulence caused by Brexit, however, remains a key concern this year.
The coffee shop market in the UK, which is valued at £10.1billion, went up by 7.9% in terms of turnover growth during 2018, according to a study by Allegra World Coffee Portal.
The coffee-focused segment also saw 8.1% outlet growth, with Costa Coffee, Starbucks and Caffe Nero taking the lead with 2,655 outlets, 992 and 683 stores respectively.
Store count of branded coffee shops grew by 8.7% at 8,149 outlets and is predicted to exceed 10,000 outlets by 2023. The market’s compound annual growth rate for the next five years is at 5%.
“More growth will continue, albeit at a slower pace, as the economy is subjected to myriad pressures, including structural retail change, technological development, changing consumer habits and deep uncertainty on the numerous potential outcomes of Brexit,” Allegra’s CEO Jeffrey Young said.
Allegra mentioned that 2018 marked the 20th year the coffee shop market has seen sales growth, but they also warned that the tables could turn due to the growing Brexit uncertainty and it could be a key concern for 2019.
Over the last 18 months, this is said to have brought growing anxiety on labour shortages, rising prices, investment and eroded consumer confidence.
In addition, nearly half of industry leaders admitted that Brexit brings a negative impact on their businesses, whilst 69% thinks that it has negatively affected consumer confidence. 86% agreed that Brexit has damaged the UK economy.
Allegra also added that the reduced consumer confidence was due to the rise of value-focused chains in 2018 as Greggs and McDonald’s introduces coffee-focused strategies that offers cheaper coffee to consumers.
