Recent data from the Lumina Intelligence Eating and Drinking Out Panel indicates that economic improvements are positively impacting the coffee shop sector. The report highlights key market trends driven by eased cost of living pressures and increased consumer confidence.
The latest market insights reveal a significant uptick in market penetration for coffee shops, increasing by 4.6% to 59.0% for the total market. This growth is attributed to a year-on-year decline in inflation and rising consumer confidence. High interest rates have kept the frequency of visits stable at 1.4, as consumers continue to be selective with their spending.
The increase in market penetration has led to a notable rise in drink-only occasions, which have grown by 1.3%. This trend reflects the growing number of consumers seeking necessity-driven visits. Coffee and sandwich shops have benefitted the most, with their share increasing by 2.2%, indicating a preference for drink-only occasions within this channel.
In contrast, pubs and bars have experienced a decline, with their share dropping by 1.0%. This downturn is linked to a reduction in dinner occasions (-0.5%) and adverse weather conditions, which have deterred consumers from visiting beer gardens and terraces. Traditional pub fare such as chips, wedges, fries, burgers, and pizza has lost share, while cake has gained 2.0% in popularity, driven by the coffee shop trend.
