Caffeine kick: UK coffee lovers will spend more than £4bn this year

UK consumers will spend more than £4bn getting their caffeine fix from high street coffee shops this year.

Spending at coffee shops, from Costa Coffee to Starbucks, will reach an all-time high this year, with sales up £1bn since 2015, according to research from Mintel.

However, the rate of sales growth slowed by two-thirds between 2015 and 2019 as drinkers looked beyond high street coffee chains to buy hot drinks.

A quarter of consumers buy hot drinks from fast food chains such as McDonald’s, while a fifth buy them from a supermarket or in-store cafe such as Tesco and Ikea. One in six consumers seek out a traditional cafe to enjoy their hot drink.

“Coffee shops have enjoyed robust growth over the last five years,” said Trish Caddy, a senior foodservice analyst at Mintel. “However, the market continues to face tough competition from non-specialists such as fast food outlets and supermarkets.”

Nevertheless, the popularity of the high street coffee shop chain is highlighted in Mintel’s, which shows that almost half (48%) of UK consumers bought a hot drink at Costa Coffee in a three-month survey period last year. Starbucks ranked second at 30%, with fast food chains in aggregate third at 26%.

“Continued growth is being boosted by more high street coffee shop brands expanding in the retail, travel and leisure sectors,” Caddy said.

While coffee remains by far the most popular hot drink, accounting for 80% of all purchases out-of-home across the survey period, Mintel says tea is having something of a resurgence. The company found that 43% of those surveyed who bought a hot drink chose tea, up from 39% a year ago.

Half of millennials selected tea as their hot drink of choice when they were out. While the classic “builders’ tea” retains its enduring popularity across all demographics, millennials are delving into specialty variants.

“Specialty black, green and fruit, herbal and spice teas are particularly popular among 16- to 34-year-olds,” Caddy said. “Many of the latest ingredient-focused tea-based drinks, such as matcha green tea and herbal teas that give a sense of occasion, suit young consumers.”

The report also found that 57% of consumers agree that more coffee shops should charge customers a fee for using disposable coffee cups. Mintel said that an outright ban could be harmful to the coffee-on-the-go crowd, citing the independent chain Boston Tea Party, which was hit by a fall in sales of £250,000 across its 22 cafes after it stopped using disposable cups.

“There is no doubt that disposable coffee cups have been an essential component to the convenience of takeaway coffee,” Caddy said. “A total ban will alienate some coffee shop consumers who are motivated by convenience in the first place.”

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