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Coffee Shops - UK - October 2013

Published By :

Mintel

Published Date : Oct 2013

Category :

Beverages

No. of Pages : 161 Pages

Trends in the retail market demonstrate operators’ attempts to foster a greater sense of emotional connection between consumer and coffee producer in order to gain market share. Coffee shop operators could do well to apply this principle to the out-of-home environment as well seeing as 22% of out-of-home hot drink purchasers state they prefer coffee shops which support producers.
Table of Content

Introduction

Definition
Abbreviations

Executive Summary

The market
Figure 1: UK coffee shops market size and forecast, 2008-18
Market factors
Companies, brands and innovation
Companies
Figure 2: Outlet numbers of selected leading specialist coffee chains, 2011 and 2013
Who’s innovating?
The consumer
Outlets used to buy hot drinks out of home
Figure 3: Outlets used to buy hot drinks out of home, July 2013
Frequency of visiting coffee shops
Figure 4: Frequency of using a coffee shop, July 2013
Factors which influence venue choice
Figure 5: Factors influencing where hot drinks are purchased out of home, July 2013
Factors which influence drink choice out of home
Figure 6: Factors affecting out-of-home drinks choice, July 2013
Attitudes towards out-of-home coffee
Figure 7: Attitudes towards coffee out of home, July 2013
What we think

Issues in the Market

How can operators further leverage the wide range of occasions associated with the ritual of coffee drinking?
What areas can operators develop to win over older users?
How can operators leverage product origin more effectively?
What initiatives can help operators to further appeal to younger consumers?

Trend Application

Responsive brands
Fostering local partnerships and connections
Human versus robot

Market Drivers

Key points
Consumer confidence nearly reaches pre-recession levels in 2013
Figure 8: Consumer Confidence Index, January 2007-September 2013
Trends in the price of coffee
Figure 9: Retail price indices for coffee and other hot drinks, 2008-13
Starbucks loses customer trust following tax avoidance
Figure 10: Trust in selected brands in the coffee shops sector, December 2010 and August 2013
Demographic trends
Figure 11: Trends in the age structure of the UK population, 2008-18

Competitive Context

Key points
In home
In-home coffee goes from strength to strength
Tea consumption is in decline
Growth predicted for hot chocolate and malted drinks
Soft drinks
Out of home
Snacking operators
Fast food operators
Lunch operators

Who’s Innovating?

Key points
Expansion of tailored concepts to meet the needs of additional distribution channels
Flavoured coffee drinks
New food launches

Market Size and Forecast

Key points
Coffee shops market size and forecast
Figure 12: UK coffee shops market size and forecast, at current and 2013 prices, 2008-18
Figure 13: UK coffee shops market size and forecast, 2008-18
Forecast methodology

Market Share

Key points
Costa Coffee remains dominant operator
Figure 14: Outlet numbers of selected UK coffee shops, 2011 and 2013

Companies and Products

Key points
Specialist coffee shop operators
Figure 15: Outlet numbers of selected specialist coffee chains, 2011 and 2013
Costa Coffee
Financial performance
Recent developments – stores
Recent developments – food and drink
Recent developments – other
Starbucks
Financial performance
Figure 16: Financial performance of Starbucks Coffee Limited UK, 2009-12
Recent developments – stores
Recent developments – food and drink
Recent developments – promotions
Recent developments – other
Caffè Nero
Financial performance
Figure 17: Financial performance of Caffè Nero Group Limited, 2010-13
Recent developments
Coffee Republic
Recent developments
Case study: New entrant – Harris + Hoole (H+H)

Brand Communication and Promotion

Key points
Operators look to advertising to remain top of mind
Alternative payment methods

Brand Research

Brand map
Figure 18: Attitudes towards and usage of brands in the coffee shops sector, August 2013
Correspondence analysis
Brand attitudes
Figure 19: Attitudes, by coffee shops brand, August 2013
Brand personality
Figure 20: Coffee shops brand personality – macro image, August 2013
Figure 21: Coffee shops brand personality – micro image, August 2013
Brand experience
Figure 22: Coffee shops brand usage, August 2013
Figure 23: Satisfaction with various coffee shops brands, August 2013
Figure 24: Consideration of coffee shops brands, August 2013
Figure 25: Consumer perceptions of current coffee shops brand performance, August 2013
Brand index
Figure 26: Coffee shops brand index, August 2013
Target group analysis
Figure 27: Target groups, August 2013
Figure 28: Coffee shops brand usage, by target groups, August 2013
Group One – Conformists
Group Two – Simply the Best
Group Three – Shelf Stalkers
Group Four – Habitual Shoppers
Group Five – Individualists

Who Buys Coffee Out of Home and Where do They Go?

Key points
Outlets used to buy hot drinks out of home
Figure 29: Outlets used to buy hot drinks out of home, July 2013
Frequency of visiting coffee shops
Figure 30: Frequency of using a coffee shop, July 2013

Factors Influencing where Hot Drinks are Purchased Out of Home

Key points
Convenience trumps brand in venue choice
Figure 31: Factors influencing where hot drinks are purchased out of home, July 2013
Young consumers are price-focused
Older consumers are looking for more pleasant environments

Factors Affecting Out-of-home Drinks Choice

Key points
Demand for safe adventure
Figure 32: Factors affecting out-of-home drinks choice, July 2013
Price versus authenticity
The ‘treat’ nature of out-of-home hot drinks affects demand for low-calorie or low-fat options
Charitable contributions fail to motivate purchases but can work to improve CSR perceptions

Attitudes Towards Out-of-home Coffee

Key points
Poor value-for-money perceptions affecting customer retention as consumers age and speed of service loses relevancy
Figure 33: Attitudes towards coffee out of home, July 2013
More than one in ten have cut back their expenditure at coffee shops
Are UK consumers really coffee connoisseurs?
The potential of click-and-collect services

Appendix – Market Size and Forecast

Figure 34: UK coffee shops market size and forecast, at current and 2013 prices, 2008-18
Figure 35: UK coffee shops market size and forecast, 2008-18
Figure 36: Best- and worst-case forecasts for UK chicken and burger bar market, 2013-18

Appendix – Brand Research

Figure 37: Brand usage, August 2013
Figure 38: Brand commitment, August 2013
Figure 39: Brand momentum, August 2013
Figure 40: Brand diversity, August 2013
Figure 41: Brand satisfaction, August 2013
Figure 42: Brand attitude, August 2013
Figure 43: Brand image – macro image, August 2013
Figure 44: Brand image – macro image, August 2013
Figure 45: Profile of target groups, by demographics, August 2013
Figure 46: Psychographic segmentation, by target groups, August 2013
Figure 47: Brand usage, by target groups, August 2013
Brand index
Figure 48: Brand index, August 2013

Appendix – Who Buys Coffee Out of Home and Where do they Go?

Figure 49: Outlets used to buy hot drinks out of home, July 2013
Figure 50: Most popular outlets used to buy hot drinks out of home, by demographics, July 2013
Figure 51: Next most popular outlets used to buy hot drinks out of home, by demographics, July 2013
Figure 52: Other outlets used to buy hot drinks out of home, by demographics, July 2013
Figure 53: Factors influencing where hot drinks are purchased out of home, by most popular outlets used to buy hot drinks out of home, July 2013
Figure 54: Factors influencing where hot drinks are purchased out of home, by next most popular outlets used to buy hot drinks out of home, July 2013
Figure 55: Factors affecting out-of-home drinks choice, by most popular outlets used to buy hot drinks out of home, July 2013
Figure 56: Factors affecting out-of-home drinks choice, by next most popular outlets used to buy hot drinks out of home, July 2013
Figure 57: Attitudes towards coffee out of home, by most popular outlets used to buy hot drinks out of home, July 2013
Figure 58: Attitudes towards coffee out of home, by next most popular outlets used to buy hot drinks out of home, July 2013
Figure 59: Outlets used to buy hot drinks out of home, by most popular outlets used to buy hot drinks out of home, July 2013
Figure 60: Outlets used to buy hot drinks out of home, by next most popular outlets used to buy hot drinks out of home, July 2013

Appendix – Frequency of Visiting Coffee Shops

Figure 61: Frequency of using a coffee shop, July 2013
Figure 62: Frequency of drinking in a coffee shop, by demographics, July 2013
Figure 63: Frequency of having a takeaway from a coffee shop, by demographics, July 2013

Appendix – Factors Influencing where Hot Drinks are Purchased Out of Home

Figure 64: Factors influencing where hot drinks are purchased out of home, July 2013
Figure 65: Most popular factors influencing where hot drinks are purchased out of home, by demographics, July 2013
Figure 66: Next most popular factors influencing where hot drinks are purchased out of home, by demographics, July 2013
Figure 67: Other factors influencing where hot drinks are purchased out of home, by demographics, July 2013
Figure 68: Factors influencing where hot drinks are purchased out of home, by most popular factors influencing where hot drinks are purchased out of home, July 2013
Figure 69: Factors influencing where hot drinks are purchased out of home, by next most popular factors influencing where hot drinks are purchased out of home, July 2013
Figure 70: Factors affecting out-of-home drinks choice, by most popular attitudes towards coffee out of home, July 2013
Figure 71: Factors affecting out-of-home drinks choice, by next most popular attitudes towards coffee out of home, July 2013
Figure 72: Attitudes towards coffee out of home, by most popular factors influencing where hot drinks are purchased out of home, July 2013
Figure 73: Attitudes towards coffee out of home, by next most popular factors influencing where hot drinks are purchased out of home, July 2013

Appendix – Factors Affecting Out-of-home Drinks Choice

Figure 74: Factors affecting out-of-home drinks choice, July 2013
Figure 75: Most popular factors affecting out-of-home drinks choice, by demographics, July 2013
Figure 76: Next most popular factors affecting out-of-home drinks choice, by demographics, July 2013
Figure 77: Factors affecting out-of-home drinks choice, by most popular factors affecting out-of-home drinks choice, July 2013
Figure 78: Factors affecting out-of-home drinks choice, by next most popular factors affecting out-of-home drinks choice, July 2013
Figure 79: Factors influencing where hot drinks are purchased out of home, by most popular factors affecting out-of-home drinks choice, July 2013
Figure 80: Factors influencing where hot drinks are purchased out of home, by next most popular factors affecting out-of-home drinks choice, July 2013

Appendix – Attitudes Towards Out-of-home Coffee

Figure 81: Attitudes towards coffee out of home, July 2013
Figure 82: Most popular attitudes towards coffee out of home, by demographics, July 2013
Figure 83: Next most popular attitudes towards coffee out of home, by demographics, July 2013
Figure 84: Other attitudes towards coffee out of home, by demographics, July 2013
Figure 85: Attitudes towards coffee out of home, by most popular attitudes towards coffee out of home, July 2013
Figure 86: Attitudes towards coffee out of home, by next most popular attitudes towards coffee out of home, July 2013
Figure 87: Outlets used to buy hot drinks out of home, by most popular attitudes towards coffee out of home, July 2013
Figure 88: Outlets used to buy hot drinks out of home, by next most popular attitudes towards coffee out of home, July 2013
Figure 89: Factors influencing where hot drinks are purchased out of home, by most popular attitudes towards coffee out of home, July 2013
Figure 90: Factors influencing where hot drinks are purchased out of home, by next most popular attitudes towards coffee out of home, July 2013
Figure 91: Factors affecting out-of-home drinks choice, by most popular attitudes towards coffee out of home, July 2013
Figure 92: Factors affecting out-of-home drinks choice, by next most popular attitudes towards coffee out of home, July 2013

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