2012 was a good year for U.K. coffee cafés. Among Leading 100 U.K. chains, the coffee café segment grew sales 12.2 percent, due largely to U.K.-based Costa Coffee (sales up 18.5 percent) and Starbucks (sales up 6.1 percent). Together, these two brands made up over 80 percent of coffee cafés sales within the Leading 100, while the remainder came from Caffe Nero, Wacky Warehouse (Corner Coffee) and AMT Coffee Bars.
New players to the category, however, are expected to heat up competition. Harris + Hoole, a coffee shop concept backed by U.K. retail-giant Tesco, has opened seven stores since the start of the year (for a total of 17). The chain focuses on its independent look and feel, which changes based on location. Italy-based Lavazza announced its intentions of opening 50 Lavazza Espression shops across the U.K. by 2015. With four locations currently in the country, this upscale coffee café concept features a large selection of Lavazza espresso beverages, as well as a menu that was created through Lavazza’s partnerships with world-renowned chefs.
The popularity of high quality coffee in the U.K. has also gotten the attention of brands in other categories. Wanting to take its own share of the market, KFC U.K. rolled out Lavazza coffee at its outlets nationwide earlier this year. Greggs, the U.K. brand known for its chain of bake shops, has launched a coffee shop concept called Greggs moment, which features fairtrade coffee and a selection of specialties from its bakery menu.
As competition increases, coffee players will have to focus on what customers expect from their brands and work to exceed those expectations. This could mean addressing quality, product variety, increased demands for convenience or shop décor.
Even proven winners have to work to remain relevant to consumers in order to maintain growth. To that end, Costa Coffee and Starbucks have announced