Coffee & Sandwich Shops

2009 UK - Market Assessment

Publication Date	July 2009
Publisher	Key Note
Product Type	Report
Pages	124
ISBN Number	not applicable
Product Code	KEY00175

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Summary

The number of branded coffee- and sandwich-shop outlets in the UK and the Republic of Ireland has continued to increase at a rapid pace. Between mid-2005 and late 2008, the number of coffee shops operated under the top 12 brands rose by 74.9%, while the number of sandwich shops operated under the top 13 brands increased by 58.5%. This was principally due to the activities of Costa, Starbucks, Caffè Nero, Caffè Ritazza and Coffee Republic in terms of coffee shops, and Subway in terms of sandwich shops. Subway's growth has been a particular factor in the market, with its number of outlets now equalling the number operated by the sector leader, Greggs.

Although major operators such as Costa, Caffè Nero, Pret a Manger and EAT have many of their outlets in London and the South East, the trend over the past few years has been to open outlets in the high streets and shopping centres of regional cities and towns, and at other high-footfall locations, such as airports, railway stations, motorway service stations, petrol-station forecourts, cinemas, universities, hospitals, leisure centres and theme parks.

There has been increasing competition from other retailers, such as department stores, variety stores and the larger supermarkets, many of which have refurbished their cafe(C) and restaurant facilities. However, some of these in-store coffee shops are run by the major branded chains, such as Costa. Many of the major UK-based branded coffee- and sandwich-shop operators have also been expanding abroad, largely through franchises and joint ventures. The principal regions involved are the Middle East, Eastern Europe, India, Russia and various Pacific Rim countries - notably China.

As relatively expensive locations for what are essentially quick meals and mid-morning or mid-afternoon snacks, the branded chains are now under threat from the current economic recession. An original consumer survey for this report found that 41.8% of respondents were likely to cut back on visiting coffee and sandwich shops in the future as a result of the recession.

Among the coffee majors, only Starbucks has so far announced any outlet closures (mainly in the US and Australia, but also now in Europe). However, most of the major coffee- and sandwich-shop operators are likely to scale back their plans for further outlet openings. The recent strong growth in outlet numbers is thus forecast to fall significantly over the next 5 years, during a recession that could affect the market until 2012.

Content

Executive Summary
1. Introduction
- BACKGROUND
- DEFINITION
2. Strategic Overview
- MARKET DYNAMICS AND SEGMENTATION
- Factors Affecting the Market
- Changing Demographics
- Table 2.1: Users of Coffee Shops in the Last 12 Months by Frequency of Visit by Sex, Age and Social Grade (% of adults), March 2008
- Table 2.2: Users of Sandwich Shops in the Last 12 Months by Frequency of Visit by Sex, Age and Social Grade (% of adults), March 2008
- Table 2.3: The Actual and Forecast UK Population by Age Group (% and million), 1971-2031
- Table 2.4: Population Distribution in Great Britain by Social Grade (% of adults), 1988-2008
- Figure 2.1: Population Distribution in Great Britain by Social Grade (% of adults), 2008
- Saturation in London, Expansion into the Regions
- Table 2.5: Users of Coffee Shops in the Last 12 Months by Frequency of Visit by Region (% of adults), March 2008
- Table 2.6: Users of Sandwich Shops in the Last 12 Months by Frequency of Visit by Region (% of adults), March 2008
- Table 2.7: Resident Populations of Major British Conurbations (000 and %), 1991, 2001 and 2007
- The Major Branded Chains: Number of Outlets by Region
- Table 2.8: Selected Leading Coffee-Shop Operators by Number of Outlets by Region, Late 2008
- Table 2.9: Selected Leading Sandwich-Shop Operators by Number of Outlets by Region, Late 2008
- The Evolution of Coffee and Sandwich Shops
- Household Expenditure on Restaurant and Café Meals
- Table 2.10: Household Final Consumption Expenditure on Restaurant and Café Meals (bn), 2004-2008
- Growth in the Number of Working Women
- Table 2.11: The UK Working Population by Sex (million and %), 1971-2007
- Table 2.12: Full-Time and Part-Time Workers by Sex (million), 1985 and 2007
- Figure 2.2: The UK Working Population by Sex (million), 1971-2007
- The Economic Downturn
- The Total Coffee- and Sandwich-Shop Market
- Table 2.13: Number of Outlets Operated by the Leading Coffee and Sandwich Shops, 2004/2005-2008
- COMPETITIVE STRUCTURE
- Coffee Shops
- Sandwich Shops
- Competition from Other Retailers
- Table 2.14: Selected Major Retailers with Cafés by Number of Outlets, Late 2008
- Openings Abroad
- Table 2.15: Selected Leading Coffee and Sandwich Shops with Locations Outside the UK and Republic of Ireland, 2009
- ADVERTISING AND PROMOTION
- MARKET FORECASTS
- Table 2.16: Forecast Number of Outlets Operated by the Leading Coffee and Sandwich Shops, Mid-Years 2009-2013
3. Coffee Shops
- THE LEADING COFFEE-SHOP OPERATORS
- By Number of Outlets
- Table 3.1: Leading Operators of Branded Coffee Shops by Number of Outlets in the UK and Republic of Ireland (number and %), 2004/2005-2008
- By Turnover
- Table 3.2: Selected Leading Operators of Branded Coffee Shops by Turnover (£m), 2004/2005-2007/2008
4. Sandwich Shops
- THE COMMERCIAL SANDWICH MARKET
- Table 4.1: Sandwich Sales by Type of Retail Outlet by Volume and Value (%, billion and £bn), Years Ending May 2006 and 2007
- THE LEADING SANDWICH-SHOP OPERATORS
- By Number of Outlets
- Table 4.2: Leading Operators of Branded Sandwich Shops by Number of Outletsin the UK and Republic of Ireland (number and %), 2004/2005-2008 By Turnover
- Table 4.3: Selected Leading Operators of Branded Sandwich Shops by Turnover (£m), 2004/2005-2007/2008
5. Advertising and Promotion
- MAIN MEDIA ADVERTISING
- OTHER PROMOTIONAL ACTIVITIES
6. An International Perspective
- THE EUROPEAN MARKET
- Coffee Shops
- Sandwich Shops
7. PEST Analysis
- POLITICAL FACTORS
- ECONOMIC FACTORS
- SOCIAL FACTORS
- TECHNOLOGICAL FACTORS
8. Consumer Dynamics
- OVERVIEW
- Table 8.1: Attitudes Towards Coffee and Sandwich Shops
- (% of respondents), 2009
- DETAILED SURVEY RESULTS
- 'I Have Visited a Branded Coffee Shop Such as Starbucks, Costa or Caffè Nero in the Last 3 Months'
- Table 8.2: I Have Visited a Branded Coffee Shop Such as Starbucks, Costa or Caffè Nero in the Last 3 Months by Socio-Demographic Group (% of respondents), 2009
- 'I Have Visited a Branded Sandwich Shop Such as Subway, Pret a Manger, Greggs/Bakers Oven or O'Briens in the Last 3 Months'
- Table 8.3: I Have Visited a Branded Sandwich Shop Such as Subway, Pret a Manger, Greggs/Bakers Oven or O'Briens in the Last 3 Months by Socio-Demographic Group (% of respondents), 2009
- 'I Have Visited Branded Coffee or Sandwich Shops Less in the Last 3 Months Than Previously'
- Table 8.4: I Have Visited Branded Coffee or Sandwich Shops Less in the Last 3 Months
- Than Previously by Socio-Demographic Group (% of respondents), 2009
- 'I Tend to Choose the Major Chains of Branded Coffee Shops if Possible in Preference to Smaller Independents'
- Table 8.5: I Tend to Choose the Major Chains of Branded Coffee Shops if Possible in Preference to Smaller Independents
- by Socio-Demographic Group (% of respondents), 2009
- 'I Tend to Choose the Major Chains of Branded Sandwich Shops if Possible in Preference to Smaller Independents'
- Table 8.6: I Tend to Choose the Major Chains of Branded Sandwich Shops
- if Possible in Preference to Smaller Independents
- by Socio-Demographic Group (% of respondents), 2009
- 'If I Go Out at Lunchtime I Tend to Have Cold Foods at Coffee or Sandwich Shops'
- Table 8.7: If I Go Out at Lunchtime I Tend to Have Cold Foods at Coffee or
- Sandwich Shops by Socio-Demographic Group (% of respondents), 2009
- 'If I Go Out at Lunchtime I Tend to Have Hot Foods at a Café, Restaurant or Pub'
- Table 8.8: If I Go Out at Lunchtime I Tend to Have Hot Foods at a Café(C), Restaurant
- or Pub by Socio-Demographic Group (% of respondents), 2009
- 'I Think Foods and Drinks at Coffee or Sandwich Shops Are Competitively Priced'
- Table 8.9: I Think Foods and Drinks at Coffee or Sandwich Shops Are Competitively
- Priced by Socio-Demographic Group (% of respondents), 2009
- 'I Think Foods and Drinks at Coffee or Sandwich Shops Are Expensive'
- Table 8.10: I Think Foods and Drinks at Coffee or Sandwich Shops Are Expensive
- by Socio-Demographic Group (% of respondents), 2009
- 'I Would Visit Coffee or Sandwich Shops More if Prices Were Lower'
- Table 8.11: I Would Visit Coffee or Sandwich Shops More if Prices Were Lower
- by Socio-Demographic Group (% of respondents), 2009
- 'I Tend to Visit the Café(C)s at Supermarkets, Marks & Spencer or Department Stores, Rather than the Branded Coffee or Sandwich Shops'
- Table 8.12: I Tend to Visit the Cafés at Supermarkets, Marks & Spencer or Department Stores, Rather than the Branded Coffee or Sandwich Shops by Socio-Demographic Group (% of respondents), 2009
- 'I Think That I Am Likely to Cut Back on Visiting Coffee or Sandwich Shops in the Future as a Result of the Recession'
- Table 8.13: I Think That I Am Likely to Cut Back on Visiting Coffee or Sandwich Shops
- in the Future as a Result of the Recession by Socio-Demographic Group
- (% of respondents), 2009
9. Company Profiles
- BACKGROUND
- COFFEE SHOPS
- AMT Coffee Ltd
- Table 9.1: AMT Coffee Ltd ??