Table of Contents
Overview
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- Key issues covered in this Report
- Products covered in this Report
- COVID-19: Market context
- Economic and other assumptions
Executive Summary
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- Impact of COVID-19 on coffee shops market
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- Figure 1: Expected impact of COVID-19 on coffee shops, in short, medium and long term, 20 November 2020
- The market
- Coffee shops market dives in 2020
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- Figure 2: UK coffee shops market, value sales and forecast, 2015-25
- Companies and brands
- Developing retail ranges
- The consumer
- Going out for drinks is a popular activity among Britons
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- Figure 3: Coffee shops vs non-specialist venues visited, September 2020
- More room to explore emerging formats in cities and large towns
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- Figure 4: Retail formats used for drink purchases from coffee shops, by areas, September 2020
- Digital ordering methods appeal to younger consumers
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- Figure 5: Ordering methods used for drink purchases from coffee shops, by age groups, September 2020
- Supporting busy parents throughout the day
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- Figure 6: Drink purchases from coffee shops by dayparts, September 2020
- Cheaper alternatives fuelling consumer cutbacks
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- Figure 7: Future intention on frequency of drink purchases from coffee shops, by parental status, September 2020
- Monitor prices, loyalty schemes and eco-friendly initiatives
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- Figure 8: Satisfaction levels with drink purchased most recently from a coffee shop, September 2020
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- Figure 9: Key drivers of overall satisfaction with drink purchase from a coffee shop, September 2020
- Coffee shops pivot to cater to customers at home
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- Figure 10: Attitudes towards coffee shops, September 2020
Issues and Insights
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- COVID-19’s impact on at-home coffee shop experiences
- Coffee shops’ role in nudging people towards healthier choices
- Coffee shops’ role in bringing people together
The Market – Key Takeaways
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- Coffee shops’ recovery begins 2021
- VAT cut could stimulate the coffee shops market
- Relaxed takeaway regulations
- Impact of obesity strategy on coffee shops
Market Size and Forecast
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- Impact of COVID-19 on coffee shops market
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- Figure 11: Expected impact of COVID-19 on coffee shops, in short, medium and long term, 20 November 2020
- Coffee shops market dives in 2020…
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- Figure 12: UK coffee shops market, value sales and forecast, 2015-25
- …but recovery begins in 2021
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- Figure 13: UK coffee shops market, value sales and forecast, 2015-25
- Market drivers and assumptions
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- Figure 14: Key drivers affecting Mintel’s market forecast, 2020-24 (prepared July 2020)
- Lessons learnt from the last recession
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- Figure 15: UK coffee shops market size and forecast, 2008-13
- Forecast methodology
- COVID-19: Market context
Market Drivers
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- VAT cut could stimulate the coffee shops market…
- … but severe restrictions put the brakes on recovery
- Relaxed takeaway regulations
- Impact of obesity strategy on coffee shops
Companies and Brands – Key Takeaways
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- Product changes to serve home-based consumers
- Adapting places to best serve communities
- Pricing adjustments to encourage purchases
- Meaningful shifts shaping promotional strategies
- McDonald’s McCafé pours £11m into ad spend
Launch Activity and Innovation
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- Coffee shops reassess the four Ps of marketing
- Product changes to serve home-based consumers
- Bag-in-box coffee
- Premiumisation
- Home brewing kits
- Ready-to-drink
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- Figure 16: Almond Based Iced Coffee (RTD), by Starbucks
- Adapting places to best serve communities
- Mobilising coffee shops
- Coffee workspace
- Pricing adjustments to encourage purchases
- Price cuts
- Meal deals
- Meaningful shifts shaping promotional strategies
- Coffee subscription
- Careful indulgence
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- Figure 17: Nutrition information of a hot chocolate drink by Costa Coffee
- Recycling options
Advertising and Marketing Activity
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- McDonald’s pours £11m into its no-frills coffee
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- Figure 18: Advertising expenditure by selected coffee shops, 2017-20
- Coca-Cola lets Costa shine on Piccadilly Lights
- Starbucks wins big through diversity and inclusion
- Caffè Nero’s biggest ever ad for new food menu
- Proposal to ban online advertising for HFSS items
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
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- Figure 19: Attitudes towards and usage of selected brands, November 2020
- Key brand metrics
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- Figure 20: Key metrics for selected brands, November 2020
- Brand attitudes: there’s room for Costa, Nero and Starbucks to improve value-for-money perceptions
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- Figure 21: Attitudes, by brand, November 2020
- Brand personality: Costa Coffee and McCafé on a par as most fun
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- Figure 22: Brand personality – macro image, November 2020
- Costa, Nero and Starbucks need to focus on improving healthy perceptions
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- Figure 23: Brand personality – micro image, November 2020
- Brand analysis
- Costa Coffee loses out to McCafé in terms of good value
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- Figure 24: User profile of Costa Coffee, November 2020
- Pret a Manger losing its brand differentiation
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- Figure 25: User profile of Pret a Manger, November 2020
- McCafé most associated with offering good value
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- Figure 26: User profile of McDonald’s McCafé, November 2020
- Caffè Nero needs to improve its value proposition
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- Figure 27: User profile of Caffè Nero, November 2020
- Starbucks is a legacy brand in need of new value propositions
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- Figure 28: User profile of Starbucks, November 2020
The Consumer – Key Takeaways
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- Post-COVID-19: three Trend Drivers of growth
- Wellbeing
- Identity
- Value
- Promotion: using coffee shops as a way to support health
Impact of COVID-19 on Consumer Behaviour
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- ‘Frugal mindset’ likely to persist
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- Figure 29: Trends in consumer sentiment for the coming year, January – October 2020
- Promotions much needed to drive usage
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- Figure 30: Leisure activity promotions, by age groups, October 2020
- Take out to help out
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- Figure 31: Takeaways/home delivery spending intentions over the next month, 2 November – 11 November 2020
- COVID-19’s impact on consumer priorities
- Supporting local
- Health and wellness
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- Figure 32: COVID-19's impact on consumer priorities, by age groups, 8 October – 19 October 2020
Most Popular Venues Visited
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- Coffee shops: icons of urban society
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- Figure 33: Coffee shops vs non-specialist venues visited, September 2020
- Costa fights to stay on top
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- Figure 34: Venues visited for drink purchases, by age groups, September 2020
Most Popular Coffee Shop Retail Formats
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- More room to explore emerging formats in cities and large towns
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- Figure 35: Retail formats used for drink purchases from coffee shops, by areas, September 2020
Most Popular Coffee Shop Ordering Methods
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- Digital ordering methods appeal to younger consumers
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- Figure 36: Ordering methods used for drink purchases from coffee shops, by age groups, September 2020
Most Popular Dayparts
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- Adapting to flexible working
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- Figure 37: Drink purchases from coffee shops by dayparts, September 2020
- Maintaining older consumers’ morning routines
- Supporting busy parents throughout the day
Future Purchase Intention
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- Improve value propositions to avoid cutbacks
- Exciting juice drinks shake up sales
- Value meal deals increase customer loyalty
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- Figure 38: Future intention on frequency of drink purchases from coffee shops, by parental status, September 2020
- Parents of under-18s planned to visit more often
Key Drivers of Satisfaction
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- Consumers satisfied with COVID-19 communications
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- Figure 39: Key drivers of satisfaction with drink purchase from a coffee shop, September 2020
- Promote quality, cleanliness and customer service – key driver analysis
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- Figure 40: Key drivers of overall satisfaction with drink purchase from a coffee shop, September 2020
- Monitor prices, loyalty schemes and eco-friendly initiatives – key driver analysis
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- Figure 41: Overall satisfaction with Coffee Shops - key driver output, September 2020
- Start a narrative around portion sizes and healthy options – key driver analysis
Attitudes towards Coffee Shops
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- Product: coffee shops pivot to cater to customers at home
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- Figure 42: Attitudes towards coffee shops, September 2020
- Promotion: leveraging positive customer satisfaction
- Under-25s’ positive perception of coffee shops’ RTD
- Using coffee shops as a way to support health
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- Figure 43: Example of fortified coffee, by Soylent
- Consumers want more than just a low price
- Place: a coffee shop should be the heart of a community
- Adapting the coffee shop for remote working
- Mobilising the coffee shop to reach customers
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- Figure 44: Coffee shops – CHAID – Tree output, September 2020
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- Key driver analysis methodology
- Interpretation of results
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- Figure 45: Overall satisfaction with coffee shops - key driver output, September 2020
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- Figure 46: Satisfaction with coffee shops, September 2020
- CHAID analysis methodology
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- Figure 47: Coffee shops – CHAID – Table output, September 2020
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