UK Branded Coffee Shop Market Continues to Thrive

Switching over from the regular alcoholic beverages, the coffee and café culture among the UK consumers continues to thrive, inspiring consumers and present new business opportunities for operators.

According to an annual survey of over 50,000 UK coffee shop consumers conducted by World Coffee Portal, the proportion of the customers making multiple coffee shop visits per week has increased from 56% to 60% over the last 12 months, marking a recovery from the height of the cost-of-living crisis.

The World Coffee Portal also forecasts the total UK branded coffee shop market will exceed 11,800 outlets by January 2026 and more than 13,200 by January 2030 at five-year outlet growth of 3% CAGR. Sales are expected to exceed $10.35 billion over the same period, representing five-year growth of 5.7% CAGR.

Early morning coffee shop activity increased from 22% to 24% amid a rise in commuter footfall as more workers return to offices. Meanwhile, average coffee shop spend has risen 5% to $8.06, bringing it back above 2023 levels following last year’s unprecedented decline. In all, 119 UK-based coffee chains increased their store footprint over the last 12 months, while 40 saw net store closures.

Price Factor

The annual survey also said that price consciousness is now perceived as the most important consumer trend in the UK branded coffee shop market, overtaking the growth of independent coffee shops.

With the average price of a regular latte rising 5% to reach $4.71 over the last 12 months, many major coffee chains, including Costa Coffee, Greggs and Tim Hortons, have adjusted loyalty schemes to reduce spending thresholds for redeeming rewards, or have broadened perks to include free or discounted menu items.

Further demonstrating that market-wide price increases have unsettled previously loyal consumers motivated by routine, Starbucks has frozen beverage prices over the last year, Ole & Steen has introduced a pastry of the week for a set $2.59, while coffee and food to go chains Leon and Yolk have introduced value-focused subscriptions to compete with Pret A Manger’s Club Pret.

The UK branded coffee shop market is more competitive than ever before, with a host of boutique branded chains, a strong independent coffee shop segment and value-driven non-specialist operators vying for market share.

In the specialty segment, WatchHouse, EL&N, Black Sheep Coffee and BEAR have all raised investments over the last 12 months to open more UK stores.

The UK drive-thru coffee segment also continues to grow, adding 51 stores over the last 12 months to reach 855 sites. The UK drive-thru coffee market leader, Costa Coffee added 27 sites to reach 373 over the last year, with Starbucks, Greggs and Caffè Nero also investing in the format.

The UK operators continue to voice concern over high operational costs, including record high green coffee prices, greater wage and taxation burdens and persistently high energy costs. Around 71% of operators reported positive sales growth over the last 12 months, a 7% y-o-y decline.

Nevertheless, despite short-term apprehension there is long-term optimism for a broader economic recovery and further branded chain expansion.

A Resilient Market

Commenting on the findings of Project Café UK 2025, Allegra Group Founder and CEO, Jeffrey Young said that the UK coffee shop market continues to be resilient, even in very difficult economic times as consumers face significant cost pressures and disposable income is limited.

However, coffee remains a relatively small-spend purchase and one that UK consumers value highly as a treat, opportunity to socialise and a moment of human connection, he said.

“We are now seeing an emerging trend of boutique coffee operators scaling up alongside drive-thru and smaller stores offering new ways to enjoy the UK’s vibrant coffee culture. We expect the UK branded coffee shop market to continue its growth journey over the next 3-5 years,” he added.