Food and DrinkNews

Covid-19 Dents Growth For UK Branded Coffee Shops

A report titled Project Café UK 2021 on the UK £3 billion branded coffee shop market has revealed that the £3bn sector suffered a near 40% sales decrease over the last 12 months. The market now comprises 9,159 outlets, a net decrease of 182 stores over the period

The sales decline also marked a return to sales that are the equivalent of those in 2013. Meanwhile, the total branded market now comprises 9,159 outlets, a net decrease of 182 stores (1.9%) during the period. World Coffee Portal predicted a return to pre-pandemic levels will take three years.

The government-imposed trading restriction and decreased footfall led to 59% of industry leaders surveyed reporting a year-on-year loss exceeding 5% over the last 12-months. Those loss-making operators report an average negative financial impact of £27,650 per store, per month.

Reflecting the sombre national mood, just 15% of industry leaders surveyed are positive about the current trading environment, down from 69% from 12 months ago.

Project Cafe UK 2021 cited ongoing covid-19 restrictions, “leading to temporary store closures and takeaway-only trading” as a factor in the sharp sales decline while “a steep reduction in daily commuting has decimated footfall at travel hubs and city centres” but neighbourhood outlets have benefited from increased levels of home working. Research found London has 2,330 branded coffee shops – down 1.9% on 2019 – but it still accounts for more than one quarter of all UK branded cafes.

A growing number of operators have responded by introducing hot beverage delivery, with 26% of UK consumers surveyed indicating they would regularly use this service if more readily available. Drive-thru has also proved fruitful to coffee brands.