Market intelligence analysts Key Note have issued a new Market Assessment Update titled Coffee & Sandwich Shops, which examines the UK’s coffee and sandwich shops industry, focusing on the top ten branded chains in each of the two industries, and looking at consumer buying behaviour and market trends.
More coffee shops every week: unstoppable growth
Coffee shops in particular have boomed over recent years; so far in 2013 there are over 15,000 coffee shops in the UK, with more opening every week. The market is divided into coffee shops run by chains — of which the biggest players are Costa Coffee, Starbucks and Caffé Nero — and independent stores.
Chains make up around 22% of the market, with independent outlets or small chains accounting for the rest. Many chains are currently pursuing confident expansion plans and displaying apparently unstoppable growth, seemingly unhindered by possible market saturation or by the effects of recession.
Coffee and coffee shops have become an embedded part of UK culture, and a dominant feature of every high street and town centre. Their appeal lies partly in their ability to cater for most consumer tastes, whether it is busy commuters grabbing a coffee on the go or friends meeting over a whole afternoon for coffee and a cake.
Sandwich shops
Sandwich shops are almost as popular, particularly in busy town and city centres where workers demand a quick, affordable lunch option. As with coffee shops, the sector is split into chains and independents. Greggs and Subway dominate the chain sector, representing over 80% of the top ten branded chains’ outlets.
Challenges to customer loyalty
There are challenges of course — with so much choice it is easy to lose customer loyalty. If a customer is unhappy, they can almost literally go next door the next time they want a coffee or sandwich.
To remain competitive it is essential to meet customer expectations and to react with initiative to changing economic and social trends. Sandwich shops in particular will need to react to demands for healthy food, as consumers grow more health conscious.
Ethical shopping is also becoming more important to many shoppers, particularly when it comes to coffee.
Independents versus chains: growing numbers only use independents
Independent stores face a slightly different struggle to that of the big chains, as they lack the financial security and established reputation of chain stores and cannot benefit from economies of scale.
However, their strength lies in their ability to offer a unique and down-to-earth atmosphere. A small yet growing proportion of consumers only use independent outlets and refuse to visit chains, saying they have homogenised the high street.
The future is bright
Key Note predicts a bright future for both coffee shops and sandwich shops — the number of top ten branded coffee shops is expected to grow by over 21% by 2017, while that of sandwich shops is forecast to see growth of 18.5%.
Key Note Ltd has been providing commercially relevant market information to libraries, academia and businesses for almost 30 years. With over 1,000 titles available across 29 market sectors, and new or updated titles published every month, Key Note is one of the UK’s most prolific and respected business information providers. Within the range, some reports are written in response to particular market conditions, whereas other reports will be produced regularly year on year.
Key Note’s 2011 Market Assessment Update, Coffee & Sandwich Shops is available to purchase from Key Note on 0845-504 0452, by e-mail at sales@keynote.co.uk or at www.keynote.co.uk, priced £395.