The UK now has so many coffee shops that it could be reaching saturation point. According to analysts at investment bank, Citigroup, the UK now has more than enough caffeine outlets and expansion could stall within the next five years. For investors, this could mean that major chains will be putting plans to open new branches on hold.
No more expansion for coffee outlets
In just 10 years the number of coffee shops has grown from around 10,000 to a staggering 22,000 across branded outlets, with many smaller independents adding to that figure. Costa have the most at 1,972. According to research by Allegra, Brits consume around 2.3 billion cups of coffee every year.
Even though demand for fresh coffee on the high street is growing, the major players may find that expansion is no longer an option. After all, the general public can only drink so much coffee. Coffee shops may now have to make more effort to stand out from the crowd by offering a better atmosphere, trendy new products and better food.
Hope for the future
Allegra have spent the past 20 years analysing coffee shop trends and predict that there is one fundamental driver that will always mean there is room for further growth and expansion. That driver is urban densities. All over the globe more people are moving back into city environments and high rise office blocks are shooting up everywhere. Almost every office block over a certain size can easily support a popular coffee shop.
The office coffee shop has become a place where workers can socialise and even work, rather than just popping in for a quick beverage. So confident are they in their predictions that Allegra are forecasting that there will be around 32,000 coffee outlets in the UK by 2025 and that they will even outnumber traditional pubs by the year 2030.
However, the big chains must watch out for the smaller independents who are offering artisan coffees using more expensive, higher quality ingredients, together with exotic smoothies and other alternatives. Customer loyalty and force of habit may not be enough to keep the tills ringing and expansion programmes running smoothly in the future without some radical ‘outside of the box’ thinking.
All this is great news for caffeine addicts who can rest assured that they will have no problem in getting their daily fix for the foreseeable future.
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