Food and DrinkHospitalityNews

Coffee Shop Sales Set to Hit £4bn 2020

Spending at coffee shops is set to reach £4bn this year, according to research from market analysts Mintel.

However, while coffee sales continue to flourish annual growth has slowed from 9% in 2015 when the market was worth £3bn to 3% in 2019 when it was valued at £3.9bn.

The research also found that 26% of Brits buy hot drinks from fast-food chains while 22% buy from a supermarket/store café, and 16% buy their hot drinks from traditional cafes.

Commenting on the latest out of home hot drinks trends, Trish Caddy, Mintel Senior Foodservice Analyst, said: “Coffee shops have enjoyed robust growth in the past five years, benefitting from brands’ ability to meet consumer demand for the convenience of takeaway coffee and emergence of specialty coffee. Continued growth is being boosted by more high street coffee shop brands expanding in the retail, travel, and leisure sectors.
“However, the market continues to face tough competition from non-specialists such as fast food outlets and supermarkets; a situation which is not likely to ease as non-specialists continue focusing on price and convenience. With more food outlets selling low-cost coffee, coffee shops without strong food offerings will fall behind.”
Additionally the survey revealed that while coffee is by far the most popular hot drink purchased out-of-home, tea has seen a resurgence lately: currently 43% of consumers who drink hot drinks out of home drink tea, compared to 39% a year ago, and further revealed that 57% of consumers agree that more coffee shops should charge customers a fee for using disposable coffee cups. Meanwhile, as many as 82% of customers agree that more people should use reusable coffee cups.

Ms Caddy said: “There is no doubt that disposable coffee cups have been an essential component to the convenience of takeaway coffee. In April 2019, the independent chain, Boston Tea Party, saw its sales fall by £250,000 across its 22 shops following its ban on single-use coffee cups last summer. This suggests that a total ban on the use of disposable cups will alienate some coffee shop consumers who are motivated by the convenience of takeaway coffee in the first place.

“Conversely, our research shows that Brits respond to rewards, and operators can look to offer rewards to help change behaviour. The sandwich chain Pret A Manger, for example, introduced a 50p discount for customers who bring reusable coffee cups. Both cost savings and a positive impact on the environment give consumers even more reason to visit.”