2023
9
UK Cafés and Coffee Shops Market Report 2023
2023-12-19T18:01:20+00:00
REP983B6DF9_375D_4CCE_AB35_69ED310D5FE1
2195
169100
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Report
en_GB
Coffee shops remain a beloved haven for many. To further captivate their audience, brands must embrace a more inclusive and welcoming café and coffee shop scene. Trish Caddy, Principal…

UK Cafés and Coffee Shops Market Report 2023

£ 2,195 (Excl.Tax)

Description

Stay ahead of the curve with Mintel’s UK Cafés and Coffee Shops Market Report 2023. The comprehensive report is packed with consumer-led market intelligence, the latest trends and consumer behaviours affecting the UK coffee shops industry. Get a 360° view of the market including market size, consumer insights, and five year forecasted growth.

Key Issues Covered in this Report

  • The impact of the rising cost of living on the coffee shops market, with a focus on consumers’ decision-making process.
  • The annual changes in consumers’ coffee shop visiting and purchasing habits.
  • Coffee drinkers’ preferences when choosing which coffee to buy.
  • Consumers’ usage and perceptions of key brands including Costa Coffee, Caffè Nero, Starbucks, McDonald’s McCafé and Pret A Manger.

UK Cafés and Coffee Shops – Current Market Landscape

What is the market size of the UK coffee shop market?

The UK Café and Coffee Shop market is experiencing a healthy growth, and value sales are estimated to reach £9.4 billion in 2023. Coffee shops remain a popular choice with UK consumers, with over half buying drinks from a coffee-focused venue in the past year.

  • UK Coffee shop market share: Supermarket cafés saw a 3% increase in market share in 2023, highlighting that budget-conscious consumers are prioritising price over brand.

The cost of living crisis has presented a challenge for the industry. Consumers are more budget-conscious and almost half prioritise price over brand when choosing a coffee shop, highlighting that more affordable alternatives such as supermarket cafés represent a threat to the key market players. However, during challenging economic times, consumers yearn for familiar and comforting experiences, which coffee shops can provide with a more family-friendly and inclusive atmosphere.

UK Coffee Shop Industry Trends and Opportunities

Mintel’s coffee shops market research found that in-store coffee purchases fell by 6% in 2023. While in-store purchases remain popular, deliveries and mobile kiosks are gaining ground in the UK coffee shop market. Highlighting a need for brands to focus on convenience-driven concepts to adapt to changing consumer demands.

Almost three-quarters of consumers agree that coffee shops should offer more meal deals. This highlights the importance of offering value for money during the cost of living crisis. By capitalising on this consumer demand, coffee shops can effectively broaden their appeal and enhance brand loyalty among value seekers.

Purchase Mintel’s full report for a complete analysis of the UK Cafés and Coffee Shops Market, including more opportunities for growth, analysis of what consumers want and why, and an overview of market dynamics.

More About this Report

This Report covers branded chains and independents serving coffee beverages as core products. Mintel has expanded the scope of its market size analysis to provide a more complete picture of the overall health of the evolving UK cafés and coffee shops market for this year’s Report, as opposed to covering only branded coffee shops. This year’s report includes food-focused establishments that offer barista-style beverages, such as Greggs and Pret A Manger – a segment that was previously excluded.

Additional Features Included with your Purchase

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Expert Analysis from a Foodservice Specialist

This report, written by Trish Caddy, a leading Foodservice analyst, delivers in-depth commentary and analysis to highlight current trends in the UK Cafés and Coffee Shops market and add expert context to the numbers.

Coffee shops remain a beloved haven for many. To further captivate their audience, brands must embrace a more inclusive and welcoming café and coffee shop scene.

Trish Caddy - Research AnalystTrish Caddy
Principal Analyst – Foodservice

 

 

 

Table of Contents

  1. Executive Summary

    • Opportunities for the café and coffee shop market
    • Three major opportunities for the market
    • Market dynamics and outlook
    • The five-year outlook for cafés and coffee shops
    • The market is experiencing healthy growth rates
    • Cafés and coffee shops market will continue to grow
    • Market outlook remains positive
    • Costa Coffee leads in store count
    • Evolving consumer preferences and economic headwinds
    • What consumers want and why
    • Supermarket cafés are the biggest winners
    • In-store purchases remain most popular
    • Graph 1: annual changes in retail formats used for drink purchases from coffee shops, September 2020-23
    • In-person ordering still the preferred method
    • Graph 2: annual changes in ordering methods used for drink purchases from coffee shops, 2020-23
    • Coffee continues to be the most commonly ordered drink at coffee shops
    • Graph 3: annual changes in types of drinks bought from coffee shops, 2021-23
    • Strong value propositions broaden coffee shops’ appeal
    • Graph 4: coffee shop visitation drivers, 2023
    • There is strong demand for meal deals from coffee shops
    • Graph 5: attitudes towards coffee shops, 2023
    • Innovation and marketing
    • Cafés and coffee shops continue to embrace innovation
    • High brand awareness across leading chains
    • UK’s ubiquitous coffee culture puts a premium on convenience
    • 2022 was a bumper year for coffee advertising
    • Costa Coffee’s “Made a Little Better” campaign
  2. Market Dynamics

    • Market size
    • Market set to outpace inflation in 2023
    • Strong value propositions help cafés and coffee shops grow
    • Market forecast
    • Cafés and coffee shops market will continue to grow…
    • …by adapting to changes
    • Market share
    • Costa Coffee leads in store count
    • Costa Coffee reviews its store estate across the UK
    • Greggs has emerged as a major player
    • Starbucks takes the franchise route to drive success
    • Future-proofing legacy brands
    • Ones to watch
    • Macro-economic factors
    • The UK has avoided recession, but economic output has stagnated since the cost-of-living crisis began
    • Graph 6: GDP, 2021-23
    • Inflation is still the key factor affecting consumers’ finances
    • Graph 7: CPI inflation rate, 2021-23
    • Food and drink prices still top the list of consumer concerns
    • Graph 8: living cost-related issues faced by consumers in the last two months, 2023
    • Menu prices soar as inflation continues to brew
    • Consumer sentiment: the recovery is continuing…
    • Graph 9: The financial wellbeing index, 2016-23
    • …and people feel more confident about their financial prospects
    • Graph 10: the financial confidence index, 2016-23
    • Social, environmental and legal factors
    • Addressing workforce gaps
    • The bitter taste of climate change
    • Coffee shops slammed for excessive sweet content
  3. What Consumers Want and Why

    • Annual changes in venues visited
    • Coffee shops remain threatened by non-specialists
    • Graph 11: annual changes in coffee shops vs non-specialist venues visited, 2020-23
    • Retail cafés steaming ahead
    • The shifting landscape of coffee consumption…
    • …and supermarket cafés are the biggest winners
    • Costa Coffee remains the most popular brand for out-of-home drinks
    • Annual changes in usage of coffee shop retail formats
    • Takeaways and deliveries are gaining ground
    • In-store purchases remain popular…
    • Graph 12: annual changes in retail formats used for drink purchases from coffee shops, September 2020-23
    • …but deliveries and mobile kiosks are gaining ground
    • Annual changes in coffee shop ordering methods
    • In-person purchases continue to fall …
    • Graph 13: annual changes in ordering methods used for drink purchases from coffee shops, 2020-23
    • … as younger consumers turn to online and other purchase channels
    • Graph 14: ordering methods used for drink purchases from coffee shops, by age, 2023
    • Annual changes in types of drinks
    • Coffee continues to be the most commonly ordered drink at coffee shops
    • Graph 15: annual changes in types of drinks bought from coffee shops, 2021-23
    • Coffee shops should also capitalise on hot chocolate and tea
    • Coffee shop visitation drivers
    • Strong value propositions broaden coffee shops’ appeal
    • Graph 16: coffee shop visitation drivers, 2023
    • Reward schemes are more highly valued than subscription plans
    • Variety and ambiance make the perfect cup – TURF analysis
    • Consumer choice is key for coffee shop operators…
    • …so is style
    • Coffee shop attitudes
    • There is strong demand for meal deals from coffee shops
    • Graph 17: attitudes towards coffee shops, 2023
    • Offering value for money
    • Reaching consumers on the go
    • Being more welcoming
    • Catering to the needs of night owls and early birds – CHAID analysis
    • Becoming more inclusive…
    • …and eco-friendly
    • Diversifying coffee shop experiences
    • Coffee shop customer segmentation
    • Identifying key coffee shop customer personas – cluster analysis
    • Graph 18: coffee shops consumer segmentation – cluster analysis, 2023
    • Four types of coffee shop customer personas
  4. Innovation And Marketing Trends

    • Launch activity and innovation
    • Free drink deals
    • Perks and brews
    • Late-night caffeine fix
    • An abundance of options for buying coffee
    • Embracing a dual identity
    • In-store coffee connections
    • Fuelling journeys with coffee on-the-go
    • From bean to bar
    • From shop to shelf
    • Family-friendly coffee escapes
    • Paws for coffee
    • Coffee with a conscience
    • Creating a space for all
    • Standout debuts
    • Advertising and marketing activity
    • 2022 was a bumper year for coffee advertising
    • Brands are investing heavily to stand out from the crowd
    • Costa Coffee significantly increased promotion of its mobile app in 2022
    • Costa Coffee’s ‘Made a Little Better’ campaign
    • Starbucks pours resources into advertising its coffee shops during 2022
    • Starbucks’ ‘Every Table Has A Story’ campaign
    • Caffè Nero’s toast to literature
  5. Brand Research

    • Brand map: Costa Coffee most widely used, and the most trusted
    • High brand awareness across leading chains
    • Younger generations are core users…
    • …especially younger generations and affluent consumers
    • McCafé by McDonald’s offers unbeatable affordability…
    • …while Costa Coffee leads in consumer trust and quality perceptions
    • UK’s ubiquitous coffee culture puts a premium on convenience
    • Convenience plays a pivotal role
    • Brands have cultivated distinct brand perceptions
    • McDonald’s challenged to break free from its tacky stereotype
  6. Appendix

    • Market forecast data and methodology
    • Market size : value
    • Market forecast and prediction intervals (value)
    • Forecast methodology
    • Report scope and definitions
    • Market definition
    • Abbreviations and terms
    • Methodology
    • Consumer research methodology
    • TURF analysis methodology
    • How to read: TURF analysis
    • CHAID methodology
    • Cluster analysis group definitions
    • Nielsen Ad Intel coverage

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