Coffee chains buck recession trend
Many of the UK's biggest coffee shop chains and independent cafes have defied the recession by going on an expansion spree.
The six big multiple chains — including Caffe Nero and Costa Coffee — ramped up their combined shop numbers by 47% to 2,095 in the UK over the year to September 2009, said The Local Data Company, although some chains have found the going tough.
Ben Price, the finance director of Caffe Nero, said: “We have traded pretty well through the whole recession and our like-for-like sales have stayed positive. It is about a coffee being a regular daily treat for people today and it's the change of habits over the last 10 years and that has been sustained through the downturn.”
Independents also grew their shop estate by 12.5% in the top 10 cities to 2,486 and actually grew their share of the market by one per cent to 70%. Economists had expected coffee shops to suffer from consumers cutting back during the worst recession since the Second World War, but some such as Costa Coffee have positively prospered.
Two other key drivers of the growth in coffee shops are that they are a far more pleasant environment than in years gone by, notably Wi-fi for business meetings, and operators have been able to strike cheap property deals, given the plethora of empty shops on the high street. Jeffrey Young, the managing director of Allegra, said: “Cafe culture itself is enormously powerful and it is the modern form of the pub for many consumers.”
However, it has not all been plain sailing for the multiple chains and there have been casualties. Coffee Republic, and BB's Coffee & Muffins, the Limerick-based company, have collapsed over recent months, but have subsequently emerged out of administration.
However, Starbucks has actually grown the overall number of coffee shops in the UK and Ireland from 723 at the end of its last financial year to 745 in the third quarter.