Table of Contents
Executive Summary
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- The five-year outlook for coffee shops
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- Figure 1: Category outlook, 2022-27
- The market
- Value of the coffee shops market expected to recover to its pre-pandemic level by 2024
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- Figure 2: Forecast for the value of the UK coffee shops market, at current prices, 2017-27
- Impact of polarised consumer behaviour on the coffee shops market
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- Figure 3: Preferred coffee shops’ response to rising costs, 2022
- Companies and brands
- Costa Coffee the most used brand
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- Figure 4: Key metrics for selected brands, 2022
- Brand building and mobile apps are the focus of 2021’s adspend
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- Figure 5: Advertising expenditure by selected coffee shops, 2018-22
- The consumer
- More than half of Britons buy drinks from coffee shops
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- Figure 6: Annual changes in venues visited for drink purchases, 2020-22
- In-store participation back on track
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- Figure 7: Annual changes in retail formats used for drink purchases from coffee shops, September 2020-22
- Majority of coffee shop consumers continue to order their drinks in-person
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- Figure 8: Annual changes in ordering methods used for drink purchases from coffee shops, September 2020-21
- Coffee continues to be the most-bought drink from coffee shops
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- Figure 9: Types of drinks bought from coffee shops, 2021-22
- Younger coffee drinkers continue to go against the grain
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- Figure 10: Annual changes in coffee drink preferences, 2021-22
- Almost half of coffee shop consumers spend £3 or more on a drink
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- Figure 11: Typical spend on a drink from a coffee shop, 2022
- Barista-prepared drinks vs vending machines
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- Figure 12: Attitudes towards coffee shops, 2022
Issues and Insights
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- Impact of cost-of-living crisis on coffee shops
- Decoding the polarisation of spend
- Demand for feel-good coffee shop experiences
- Ethically sourced coffee
- Non-dairy milk
- Reusable cup scheme
- Better decaffeinated drinks
Market Size and Performance
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- Value of the coffee shops market still expected to be below its 2019 level in 2022
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- Figure 13: UK forecast for the value of the coffee shops market, at current prices, 2017-22
Market Forecast
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- The five-year outlook for the coffee shops market
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- Figure 14: Category outlook, 2022-27
- Value of the coffee shops market expected to recover to its pre-pandemic level by 2024
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- Figure 15: Forecast for the value of the UK coffee shops market, at current prices, 2017-27
- Learnings from the last income squeeze
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- Figure 16: UK coffee shops market size and forecast, 2008-13
- Forecast methodology
Market Drivers
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- Impact of polarised consumer behaviour on the coffee shops market
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- Figure 17: Preferred coffee shops’ response to rising costs, 2022
- Inflation is the key concern for consumers and brands…
- …and despite government support, energy prices are still a major concern
- Rising interest rates mean that the pressure will move up to middle- and higher-income households
- High inflation and rising interest rates will weigh down the post-COVID-19 recovery
- Consumer spending power will be curbed
- Unemployment is at a near 50-year low
- Consumers’ financial wellbeing has fallen from the highs of 2021…
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- Figure 18: Household financial wellbeing index, 2016-2022
- …and most people are feeling the effects of price rises
Launch Activity and Innovation
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- Emerging retail formats
- Dark kitchens
- Vending machines
- Dining destinations
- In-store catering
- Railway stations
- Economies of scale
- New coffee shop experiences
- Hyper-customisation
- Experiential coffee shops
- Gifting occasions
Advertising and Marketing Activity
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- Brand building and mobile apps are the focus of 2021’s adspend
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- Figure 19: Advertising expenditure by selected coffee shops, 2018-22
- Coffee drinks the main focus for 2022’s budget
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
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- Figure 20: Attitudes towards and usage of selected brands, 2022
- Costa Coffee the most used brand
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- Figure 21: Key metrics for selected brands, 2022
- Younger generations are core users
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- Figure 22: Usage of coffee shop brands in the last 12 months, by generation, 2022
- Brand attitudes: Costa Coffee loses out to McCafé by McDonald's on value
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- Figure 23: Attitudes, by brand, 2022
- Brand personality: McCafé by McDonald's the most accessible
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- Figure 24: Brand personality – macro image, 2022
- Brand personality: Starbucks shows that coffee shops can be cool
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- Figure 25: Brand personality – micro image, 2022
Annual Changes in Venues Visited
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- More than half of Britons buy drinks from coffee shops
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- Figure 26: Annual changes in coffee shops vs non-specialist venues visited, 2020-22
- Costa Coffee leads the market for all out-of-home drinks
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- Figure 27: Annual changes in venues visited for drink purchases, 2020-22
Annual Changes in Most Popular Coffee Shop Retail Formats
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- In-store participation back on track
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- Figure 28: Annual changes in retail formats used for drink purchases from coffee shops, September 2020-22
- Moderate participation in emerging takeaway options
- Drive-throughs meet demand from cities and large towns
- Home delivery and mobile kiosks serve 16-34s
Annual Changes in Most Popular Coffee Shop Ordering Methods
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- Younger coffee shop consumers respond well to alternative ordering methods
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- Figure 29: Annual changes in ordering methods used for drink purchases from coffee shops, September 2020-21
Annual Changes in Types of Drinks
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- Younger coffee shop consumers are most likely to buy hot chocolate
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- Figure 30: Types of drinks bought from coffee shops, 2021-22
Annual Changes in Coffee Drink Preferences
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- Younger coffee drinkers continue to go against the grain
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- Figure 31: Annual changes in coffee drink preferences, 2021-22
Coffee Shop Price Sensitivity
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- Almost half of coffee shop consumers spend £3 or more on a drink
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- Figure 32: Typical spend on a drink from a coffee shop, 2022
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- Figure 33: Typical spend on a drink from a coffee shop, by age, 2022
Coffee Shop Attitudes
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- Coffee shop operators have to fill a greater role at operating sustainably
- Dairy-free milks are more sustainable than dairy milk
- Worth paying more for ethically sourced coffee
- Reusable cup schemes more convenient than bringing your own cup
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- Figure 34: Attitudes towards coffee shops, 2022
- Redefining value for money
- Scope for barista and vending experiences to broaden appeal
- Coffee shop subscriptions appeal to under-25s
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- Figure 35: Attitudes towards coffee shops, 2022
- Under-35s drive caffeine in moderation
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- Figure 36: Attitudes towards coffee shops, 2022
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix: Forecast Methodology
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- Market forecast and prediction intervals
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- Figure 37: Value of the coffee shops market, 2017-27
- Figure 38: Coffee shops market forecast and prediction intervals, 2022-27
- Market drivers and assumptions
- Forecast methodology
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