Project Café UK 2019, Allegra World Coffee Portal’s market report on the UK café industry, revealed that the total UK coffee shop market is valued at £10.1bn across 25,483 outlets. A 7.9% annual sales increase ‘cemented’ two decades of UK coffee shop growth, but ‘economic turbulence’ caused by Brexit ‘uncertainty’ may impede the sector.
According to the report, coffee shops are ‘well placed’ to catalyse growing consumer preference for experience-led and digitally-enhanced retail concepts – 45% of industry leaders surveyed considered social media to be the most effective form of marketing.
However, coffee quality remains the biggest factor behind café success according to industry leaders surveyed by Allegra. Reduced consumer confidence contributed to the success of value-focused chains in 2018. Allegra consumer data showed that Greggs and McDonald’s are perceived to offer the best value-for-money, with both brands introducing coffee-focused strategies in 2018.
It also showed that ‘sustained uncertainty’ on the UK’s future relationship with the EU continued to frustrate the coffee shop industry in 2018. The political impasse over the last 18 months has contributed to growing anxiety on labour shortages, rising prices, investment and eroded consumer confidence.
49% of industry leaders surveyed by Allegra indicated Brexit was negatively affecting their business, with 46% remaining neutral and 5% reporting a positive impact. 69% agreed it was negatively impacting consumer confidence, while 87% of industry leaders surveyed believe Brexit has damaged the UK economy.