2022
9
UK Coffee Shops Market Report 2022
2022-12-07T03:10:52+00:00
OX1100589
2195
158262
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Report
en_GB
"Older consumers are most likely to prefer to see the price of drinks increase if their favourite coffee shop had to make changes as a result of rising costs, while…

UK Coffee Shops Market Report 2022

£ 2,195 (Excl.Tax)

Description

The UK Coffee Shops Market Report identifies consumers’ attitudes towards visiting coffee shops, purchasing habits and the impact of the cost of living crisis on the UK coffee market. This report covers the coffee shop market size, market forecast and market segmentation for the UK coffee industry. 

 

Cafes and Coffee Shop – Market Statistics

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

The value of the coffee shops market is expected to reach £3.5 billion in 2022, up 16.4% from £3 billion in 2021. The coffee shop market is expected to continue with positive growth, with sales expected to reach £4.5 billion by 2027.

Is the UK coffee shop market growing?

Despite consistent year-on-year growth expected from 2022-27, the biggest immediate threat to the UK coffee shop market growth is inflation, as some consumers rein in expenditure on coffee shop experiences. We do not expect sales to return to 2019 levels until 2024, partly due to changes in working patterns.

Who has the largest share of the coffee shop market in the UK?

Costa Coffee are one of the leading brands in the UK coffee shop market, with 97% of consumers aware of the brand. Starbucks also enjoys a substantial market share, with 96% of UK consumers aware of them.

 

Coffee Shop Market – Current landscape

Demand for takeaway coffee services, once popular during the pandemic, has declined. In-person and on-premise experiences look set to boost the coffee shop market’s recovery rate. However, the UK coffee shop market has to contend with financial challenges associated with the cost of living crisis. These include increasing menu prices, reducing the services offered and reducing business opening hours to combat rising costs.

 

Coffee Shop – Market Outlook

Mintel’s coffee shop market research summarises how the rising cost of living crisis will lead to more polarised consumer behaviour resulting in coffee shops adopting new pricing strategies. This will include greater use of tiered pricing and subscription plans to boost footfall. Therefore, a tiered pricing strategy that offers low-cost base items, such as a 99p filter coffee, will enable the coffee shop market to cater to cost-conscious consumers while also keeping the door open for upselling.

Coffee Industry Target Market for the UK

  • 31% of 16-44-year-olds agree that reducing opening hours is their preferred solution for operators to take as a result of rising costs.
  • 33% of over-65s would prefer to see the price of drinks increase rather than a reduction in quality and portion size.
  • 39% of coffee shop consumers agree that coffee shop subscriptions (i.e. unlimited drinks) are good value for money.
  • 89% of consumers typically buy their coffee shop drinks in-store.

Future Coffee Trends

The increasingly popular healthy eating and drinking trend poses a future threat to the coffee shop market as consumers are reducing their caffeine intake. Mintel’s coffee shop market research identifies that 47% of 16-34-year-olds agree that drinking more than two cups of caffeinated coffee per day is unhealthy.

While this may result in reduced demand for caffeinated coffee, it also creates a unique opportunity to connect with new and existing coffee shop consumers. Coffee shop operators have the chance to innovate around decaffeinated drinks to ensure that the UK coffee shop market is sufficiently future-proof.

To discover more about the UK Coffee Shops Market Report 2022, read our UK Coffee Market Report 2022or take a look at our extensive Coffee Shop Market Research.

 

Quickly Understand

  • The impact of the rising cost of living on the UK coffee shop market, focusing 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 in the UK coffee shop market.

 

Leading Coffee Shop Brands

Brands: Costa Coffee, Starbucks, Caffè Nero, Coffee#1, BB’s Coffee & Muffins, Joe & The Juice, Esquires Coffee Houses, Tim Hortons, AMT Coffee, Harris + Hoole, Puccino’s, BTC, Love Coffee, Boston Tea Party, Caffè Ritazza, Coffee Republic, IKEA, Tesco, McDonald’s, Greggs, Pret, Black Sheep Coffee, Grind, Caravan, Department of Coffee and Social Affairs, Fernandez & Wells, Ozone Coffee, Carluccio’s.

 

Expert Analysis from a Specialist in the Field

This report, written by Trish Caddy, a leading senior analyst in the foodservice industry, delivers in-depth commentary on coffee shop statistics UK and analysis to highlight current trends and add expert context to the numbers.

Older consumers are most likely to prefer to see the price of drinks increase if their favourite coffee shop had to make changes as a result of rising costs, while younger coffee shop consumers are more likely to respond well to alternative measures, such as reducing opening hours and using lower-quality ingredients. ”

Trish Caddy - Research Analyst

Trish Caddy
Senior Foodservice Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Products covered in this Report
  2. Executive Summary

    • The five-year outlook for coffee shops
      • Figure 1: Category outlook, 2022-27
    • The market
    • Value of the coffee shops market expected to recover to its pre-pandemic level by 2024
      • 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
      • Figure 3: Preferred coffee shops’ response to rising costs, 2022
    • Companies and brands
    • Costa Coffee the most used brand
      • Figure 4: Key metrics for selected brands, 2022
    • Brand building and mobile apps are the focus of 2021’s adspend
      • Figure 5: Advertising expenditure by selected coffee shops, 2018-22
    • The consumer
    • More than half of Britons buy drinks from coffee shops
      • Figure 6: Annual changes in venues visited for drink purchases, 2020-22
    • In-store participation back on track
      • 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
      • 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
      • Figure 9: Types of drinks bought from coffee shops, 2021-22
    • Younger coffee drinkers continue to go against the grain
      • Figure 10: Annual changes in coffee drink preferences, 2021-22
    • Almost half of coffee shop consumers spend £3 or more on a drink
      • Figure 11: Typical spend on a drink from a coffee shop, 2022
    • Barista-prepared drinks vs vending machines
      • Figure 12: Attitudes towards coffee shops, 2022
  3. Issues and Insights

    • 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
  4. Market Size and Performance

    • Value of the coffee shops market still expected to be below its 2019 level in 2022
      • Figure 13: UK forecast for the value of the coffee shops market, at current prices, 2017-22
  5. Market Forecast

    • The five-year outlook for the coffee shops market
      • Figure 14: Category outlook, 2022-27
    • Value of the coffee shops market expected to recover to its pre-pandemic level by 2024
      • Figure 15: Forecast for the value of the UK coffee shops market, at current prices, 2017-27
    • Learnings from the last income squeeze
      • Figure 16: UK coffee shops market size and forecast, 2008-13
    • Forecast methodology
  6. Market Drivers

    • Impact of polarised consumer behaviour on the coffee shops market
      • 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…
      • Figure 18: Household financial wellbeing index, 2016-2022
    • …and most people are feeling the effects of price rises
  7. Launch Activity and Innovation

    • 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
  8. Advertising and Marketing Activity

    • Brand building and mobile apps are the focus of 2021’s adspend
      • Figure 19: Advertising expenditure by selected coffee shops, 2018-22
    • Coffee drinks the main focus for 2022’s budget
    • Nielsen Ad Intel coverage
  9. Brand Research

    • Brand map
      • Figure 20: Attitudes towards and usage of selected brands, 2022
    • Costa Coffee the most used brand
      • Figure 21: Key metrics for selected brands, 2022
    • Younger generations are core users
      • 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
      • Figure 23: Attitudes, by brand, 2022
    • Brand personality: McCafé by McDonald’s the most accessible
      • Figure 24: Brand personality – macro image, 2022
    • Brand personality: Starbucks shows that coffee shops can be cool
      • Figure 25: Brand personality – micro image, 2022
  10. Annual Changes in Venues Visited

    • More than half of Britons buy drinks from coffee shops
      • 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
      • Figure 27: Annual changes in venues visited for drink purchases, 2020-22
  11. Annual Changes in Most Popular Coffee Shop Retail Formats

    • In-store participation back on track
      • 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
  12. Annual Changes in Most Popular Coffee Shop Ordering Methods

    • Younger coffee shop consumers respond well to alternative ordering methods
      • Figure 29: Annual changes in ordering methods used for drink purchases from coffee shops, September 2020-21
  13. Annual Changes in Types of Drinks

    • Younger coffee shop consumers are most likely to buy hot chocolate
      • Figure 30: Types of drinks bought from coffee shops, 2021-22
  14. Annual Changes in Coffee Drink Preferences

    • Younger coffee drinkers continue to go against the grain
      • Figure 31: Annual changes in coffee drink preferences, 2021-22
  15. Coffee Shop Price Sensitivity

    • Almost half of coffee shop consumers spend £3 or more on a drink
      • Figure 32: Typical spend on a drink from a coffee shop, 2022
      • Figure 33: Typical spend on a drink from a coffee shop, by age, 2022
  16. Coffee Shop Attitudes

    • 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
      • 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
      • Figure 35: Attitudes towards coffee shops, 2022
    • Under-35s drive caffeine in moderation
      • Figure 36: Attitudes towards coffee shops, 2022
  17. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology
  18. Appendix: Forecast Methodology

    • Market forecast and prediction intervals
      • 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

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

Market

Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.

Consumer

Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

Brand/Company

Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

Data

Market reports provide appendices of data to support the research and insight produced. Our databooks* are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.

*databooks not available with UK B2B Industry reports.

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