Cafés and coffee shops remain resilient in the face of challenging economic conditions. While many consumers have become more selective about their spending on discretionary items, coffee is generally seen…
UK
Foodservice
Coffee
simple
UK Cafés and Coffee Shops Market Report 2024
Cafés and coffee shops remain resilient in the face of challenging economic conditions. While many consumers have become more selective about their spending on discretionary items, coffee is generally seen as an affordable luxury that people aren't willing to compromise on.
Opportunities for the cafés and coffee shops market
Opportunity to expand menu options
Offer unique food and drink options
Explore natural ingredients to boost appetite for energy drinks
Capitalise on the revival of tea
Market dynamics and outlook
The market is experiencing healthy growth rates
Market predictions
Industry set to maintain healthy rate of growth
Costa Coffee retains top position
Graph 1: number of outlets held by leading cafés and coffee shops, 2022-24
Further cost pressures on cafés and coffee shops
What consumers want and why
Fast food chains and bakery/sandwich shops gain traction in 2024
Graph 2: venues visited for drink purchases, 2021-24
In-store coffee shop purchases remain popular
Graph 3: usage of coffee shop retail formats for drink purchases, 2021-24
Tea is trending among the over-25s
Graph 4: purchase of tea from coffee shops, by age group, 2021-24
Rise in decaffeinated coffee consumption in 2024
Graph 5: caffeine preference in coffee drink purchase, 2021-24
Consumer spend in the cafés and coffee shops market
Coffee shop loyalty schemes are popular
Graph 6: coffee shop behaviours, 2024
Innovation and marketing
Retailers ramp up offerings, coffee shops expand reach
ATL ad spend in 2023 returned to normal level
Graph 7: total ATL, online display and direct mail advertising expenditure on selected OOH coffee brands, 2024
MARKET DYNAMICS
Market size
Cafés and coffee shops continue to boost revenue
Graph 8: value of cafés and coffee shops, 2019-24
Three main drivers of growth
Market forecast
Industry set to maintain healthy rate of growth
Continued product innovation will retain and attract new customers
Market share
Store growth among most leading brands
Greggs accelerates store count in 2024
Graph 9: number of outlets held by leading cafés and coffee shops, 2022-24
Costa Coffee leads the customer share of the out-of-home coffee and bakery category…
Graph 10: share of SpendMapper cohort for leading brands in the OOH coffee and bakery category, 2023-24
…and share of total spend in the last 12 months
Graph 11: share of SpendMapper cohort expenditure for leading brands in the OOH coffee and bakery category, 2023-24
Starbucks expands UK market presence
The Nero Group broadens its brand portfolio
Competitive pressures from bakeries
Small coffee shop brands aim for expansion
Established brands in the coffee and bakery category enjoy repeat purchases
Graph 12: average number of transactions made in the last 12 months, by SpendMapper cohort of select brands in the OOH coffee and bakery category, 2023-24
Market drivers
Falling inflation has reduced pressure on household finances
Graph 13: CPI inflation rate, 2021-24
Consumers continue to face price rises
Rise in National Insurance rate for employers
Starbucks scales back hedging programme
Consumer concerns over the cost-of-living crisis persist
Graph 14: perception of the state of the cost-of-living crisis in the UK, 2024
WHAT CONSUMERS WANT AND WHY
Drink purchase venues
Out-of-home drink purchases remain popular
Graph 15: venues visited for drink purchases, 2023-24
Fast food chains and bakery/sandwich shops gain traction in 2024
Graph 16: venues visited for drink purchases, 2021-24
Coffee shops face competition from non-specialist venues
Usage of coffee shop retail formats
In-store coffee shop purchases remain popular
Graph 17: usage of coffee shop retail formats for drink purchases, 2021-24
Drive-throughs, home delivery and mobile kiosks maintain steady usage
Coffee shop drink purchase ordering methods
In-person ordering in coffee shops continues to fall
Graph 18: coffee shop drink purchase, by ordering method, 2021-24
Over one in four buyers order online from coffee shops
Type of drinks purchased from coffee shops
The revival of tea…
Graph 19: coffee shop drink purchase, by type, 2021-24
…especially among the over-25s
Graph 20: purchase of tea from coffee shops, by age group, 2021-24
Opportunity for coffee shop chains to capitalise on kids’ hot chocolate
Graph 21: purchase of hot chocolate from coffee shops, by presence of children in the household, 2024
Coffee drink preferences
Rise in decaffeinated coffee consumption in 2024
Graph 22: caffeine preference in coffee drink purchase, 2021-24
Preference for dairy-milk-based coffee remains stable
Graph 23: milk preference in coffee drink purchase, 2021-24
Increase in appetite for sweet coffees in 2024
Graph 24: syrup preference in coffee drink purchase, 2021-24
Majority prefer hot coffee drinks
Graph 25: temperature preference in coffee drink purchase, 2021-24
Young coffee drinkers enjoy cold coffees
Spend in cafés and coffee shops
Two in five consumers spend between £3-£4 on coffee shop drink orders for themselves
43% spend on average £5-£7 in the OOH coffee and bakery category
Graph 26: average spend of SpendMapper cohort in the OOH coffee and bakery category, 2023-24
£7.20 the average spend per transaction in the OOH coffee and bakery category…
Graph 27: average spend for SpendMapper cohort on selected brands in the OOH coffee and bakery category, 2024
…but there is an opportunity to increase this
Spend and customer numbers fall in January
Graph 28: total spend of SpendMapper cohort in the OOH coffee and bakery category, by month, 2022-24
Graph 29: total customer numbers of SpendMapper cohort in the OOH coffee and bakery category, by month, 2022-24
Key actions to encourage spend and customer numbers in January
Fitness brands that coffee shop customers have affinities with
Coffee shop behaviours
Coffee shop loyalty schemes are popular…
Graph 30: coffee shop behaviours, 2024
…and drive higher spend
Graph 31: spend on drinks orders at coffee shops by agreement with “I take advantage of loyalty programs offered by coffee shops to earn rewards and discounts”, 2024
Young show strong interest in different food and drink menu options
Half of coffee shop consumers want unique food and drink options
OOH food brands that Costa Coffee and Starbucks customers are more likely to use than the average adult
Wide appeal among the young for unique food and drink options at coffee shops
Graph 32: enjoy visiting coffee shops that collaborate with other brands to offer unique food and drink options, by age group, 2024
Pair international drink options with corresponding food
Tap into health for unique food and drink options for over-55s
Consumers are divided about environmental impact of coffee consumption
Graph 33: concern about the environmental impact of my coffee consumption, by age group, 2024
Young show interest in energy drink options at coffee shops
Graph 34: interest in seeing more energy drink options at coffee shops, by age group, 2024
Natural ingredient-based energy drinks support appetite among young for energy drinks in coffee shops
INNOVATION AND MARKETING TRENDS
Launch activity and innovation
External competition in the out-of-home coffee sector
Premium brands debut on-the-go service
Coffee in new locations
Expanding brand reach
Costa Coffee debuts 24-hour coffee solution
Convenient/queue-busting food and hot beverages
Loyalty schemes and subscriptions
Bottled barista-quality liquid coffee
New drinks on the menu…
…including drinks that contain natural ingredients
Sustainability
Advertising and marketing activity
ATL ad spend in 2023 returned to normal level
Graph 35: total ATL, online display and direct mail advertising expenditure on selected OOH coffee brands, 2020-24
Outdoor ad spend dominates
Graph 36: total ATL, online display and direct mail advertising expenditure on selected OOH coffee brands, by media type, 2024
Costa Coffee retains its position as the biggest ATL spender
Graph 37: total ATL, online display and direct mail advertising expenditure on selected OOH coffee brands, 2024
Starbucks focuses on mental wellbeing
Boston Tea Party challenges key players on single-use cups
APPENDIX
Supplementary data
UK population trends by age structure
Graph 38: trends in the age structure of the UK population, 2018-28
How the UK café and coffee shops market is performing and projected changes in value over the next five years
Trends in coffee shop visiting and purchasing habits, including the rising threat posed by food-focused venues
Type of drinks purchased from coffee shops and coffee drink preferences, including the rising appeal of decaffeinated options
Behaviours and preferences of coffee shop customers, including their participation in loyalty programmes and interest in international drink options
Report Attributes
Details
Published Date
December 2024
Data Range
2019-2029
Measurement Metrics
Revenue in £
Country Focus
United Kingdom (UK)
Consumer Data
1,111 internet users aged 16+, September 2024
Number of Pages
84
Market Segmentation
Coffee, Tea, Hot Chocolate, Plant-Based Options, Decaffeinated Coffee, International Drinks (e.g., Vietnamese Coffee, Taiwanese Bubble Tea), Specialty Teas, Energy Drinks, and Sweet and Savory Food Items.
Leading Companies
Costa Coffee, Starbucks, Greggs, Caffè Nero, Pret A Manger, Loungers, Coffee#1, Black Sheep Coffee, Muffin Break, Tim Hortons, Gail’s Bakery, Wenzels Bakery, Aramark, Ole & Steen, and Cornish Bakery
Meet the Expert Behind the Analysis
This report was written by Yogita Burke. Yogita recently joined Mintel as a Cross-category Research Analyst. Prior to that, she worked within the retail industry for more than 20 years in the Merchandising function, where she managed financial budgets, traded the department to hit sales and profit targets, created department strategies alongside the buyers and created numerous reports.
Coffee shop consumers want unique food and drink options. By broadening menu options, operators will captivate audiences and gain a competitive edge over non-specialist venues.
There is no question that Mintel is the go-to resource for the best quality market research, but I did not think it was an affordable option for Abacus Marketing to consider. As a small marketing agency, we only work with a few new clients each year.
However, we have a very high-end consultative approach to our work, so we really do need a partner like Mintel to provide the big agency experience we are always aiming to deliver. Our clients come from an incredibly diverse range of industry sectors, so we obviously need access to market research reports from a very wide spectrum of marketplaces – and that is precisely what we got.
Stephen Taylor-Brown, Managing Director, Abacus
We’ve found it so useful working more closely with Mintel. They helped support our recent flagship event for our top suppliers by providing a really unique viewpoint on the future of online retailing.
Nick Carroll from their Retail Team was also an excellent panelist, sharing useful and actionable consumer insights. We definitely look forward to working with Mintel again on future projects.
Zac Steele, E-Commerce Trading Development Manager, Waitrose & Partners
We have such a great working relationship with Mintel on lots of different levels. As an insight partner, they have helped us to develop our business planning in specific categories as well as supporting our creative process but they’ve also been super helpful with facilitating our events in their inspirational offices near St Paul’s.
They’re an innovative company, with a client-focused team that always delivers.
Abby Carvosso, Group Managing Director, Bauer Media Group
At Jackman, we believe that powerful strategies are based on human insight. Mintel’s leading-edge reports and insights into consumer attitudes and behaviors are an important input as we develop and execute strategy.
Alana Gavin, VP Research and Insights, Jackman
We use Mintel Reports, mostly for financial services and ecommerce markets, plus a few retail and technology ones.
As a leading payments provider, we value additional insights into consumer behaviour, opinions and trends that are shaping the many different markets we operate in. Mintel is a very good and very quick way for us to obtain those insights.
We use Mintel to get a view on where a particular market is going, which can support us in product development and help us identify opportunities or indeed risks, it is a very useful barometer of a market’s potential.
Andrew Neeson, Market Intelligence Manager, VocaLink