Coffee shops - Off the boil

Sector Insight: Coffee shops - Off the boil

Design Bulletin (U.K.)
Jane Bainbridge Marketing

Rapid growth will be followed by revenue-generating non-core services in the coffee shop market.

The background: The coffee-shop sector has enjoyed a decade of rapid expansion as branded chains have taken over the nation's high streets.

But the next few years should see a slowdown in growth. The market is maturing, with inner cities already reaching saturation point. As a result, chains are looking to product development and extra services such as music and internet access to drive sales growth, rather than franchising and licensing. There may still be scope to open shops in the suburbs and rural regions, but such expansion is unlikely to go unchallenged by the anti-globalisation lobby.

UK consumers have embraced coffee-shop culture with gusto since branded shops started to appear in the 90s. Clutching a cappuccino has become such an integral part of the day for many urbanites that the market was worth £449m last year, a rise of 109% since 1999, according to Mintel.

More...