Costa tops table of coffee outlets

By Lucy Warwick-Ching Published: May 28 2007 03:00 There is now one coffee chain that is more ubiquitous in the UK than Starbucks. Whitbread's Costa chain has overtaken its US rival as Britain's biggest coffee shop by number of outlets. A report by Allegra Strategies reveals that Costa has 555 outlets, 15 more than its rival, although Starbucks leads in terms of sales. The total of branded coffee chain outlets in the UK has reached more than 3,000 with total turnover of 1.3bn. Over the next 10 years the number of outlets is expected to double with turnover rising to 2.5bn. Jeffrey Young, Allegra's managing director, says: "After eight years of consecutive like-for-like growth, a whole new landscape is emerging in the world of coffee - with the market expected to double yet again within the next decade. We continue to be surprised by the UK consumer's demand for coffee bars." In the late 1960s, the stereotypical coffee shop drinker was a poloneck-wearing chainsmoker. Forty years on, coffee shops are frequented by a broader cross-section of society, their popularity threatening to take over from the pub as the meeting place of choice. As a defence of their share of the market, pubs are trying to tap into the increasing popularity of coffee with the recent change in licensing hours allowing premises to open earlier to serve coffee and breakfasts. JD Wetherspoon opens as a coffee shop from 7am in the week, serving breakfast pastries and hot drinks and has converted some interiors to more closely mimic those of established coffee bar chains. Wetherspoon says it now has 6 per cent of the UK "chain" coffee market, matching volumes achieved by Caff Nero and a quarter of Starbucks. Non-specialist players such as Marks and Spencer and motorway stations such as BP's Wild Bean Caf are also catering for demand. A number of branded food-focused companies such as Pret a Manger and Eat also recognise the coffee market is growing rapidly and are battling for market share. However, there still seems to be potential for growth in the European market. IGD market research says a number of countries - including Ireland, Spain and Sweden - are poised for substantial growth in coffee demand. Despite drinking a lot of coffee, these countries remain underdeveloped in terms of chains relative to their populations. India and China have experienced huge growth with international cafe chains entering the market as domestic coffee chains have emerged.