The State of the Cafe Industry in the UK

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Whether you’ve recently entered the game or have been involved in the cafe industry for years, there are a range of vital statistics for professionals need to consider. People in the UK love a cup of something hot, whether to start the day, get them through the afternoon, or both. And with tea and coffee offering a 95% markup, it makes sense that the cafe industry would be such a hotpot for entrepreneurs. Cafes and coffee shops are in a transitionary stage, especially after COVID-19, making industry awareness more important than ever before.

We’ve created this blog with some core statistics and facts about the cafe business, offering a rounded perspective of the industry and where it might be headed soon. With this breakdown of consumer behaviour, market dynamics, and more, professionals should feel more confident than ever in taking on the industry!

Cafe Industry Market Overview

It’s vital to consider the impact that COVID-19 had on popular cafes and coffee shops across the country. In general, consumer spending on coffee, tea, and cocoa has more than doubled over the last 20 years, however, the pandemic caused individual spending to drop significantly. The average weekly purchase of hot beverages was 130ml in 2020, dropping to 27ml in 2021. Despite this massive drop, spending is slowly but surely building momentum again.

Branded Coffee Shops & Chains

Much of the UK’s coffee economy exists in the realm of branded coffee shops and chains, with these shops being vital elements on the Great British High Street. In 2018 the branded coffee shop market was worth an astonishing £10.1 billion, however, the pandemic resulted in a very steep market decline. During COVID’s peak, the value was cut in more than half but has been steadily rebuilt over the last few years, reaching £5.3 billion in 2023, with signs that it will continue to grow moving forward.

It’s also worth noting that £4 billion is spent in branded coffee shops every year, with around 9,885 outlets in the country overall.

Clash of the Titans: The Leading Coffee Shop Chains

Costa Coffee: 2,677 outlets
Greggs: 2,474 outlets
Starbucks: 1,266 outlets
Cafe Nero: 625 outlets

Pret a Manger: 498 outlets

Costa is still the most popular coffee shop chain in the UK in terms of revenue and number of branches, known country-wide for its quality of coffee and wide-ranging menu offerings. It’s also worth noting that Starbucks, the only non-British company on the list, has become a major player in the UK, with more locations here than in any other area of Europe.

The Boutique Bakery Sector

While most of the shops within the cafe industry offer some sort of snacks or baked goods, it’s also important to note that there’s a growing sector for boutique bakery options across the country. These options take things above and beyond a couple of croissants or brownies, putting high-level baked goods front and center alongside coffee offerings.

The leading bakery cafes include:

Gail’s: 100 outlets

PAUL: 30+ outlets

Caffe Concerto: 20 outlets

The rise of these brands has born some influence on the wider cafe culture of the UK, encouraging branded and independent coffee shops to enhance their bakery offerings.

General Coffee Consumption in the UK

The British public really loves a cup of joe, with over 98 million cups drunk in the country every day as of 2018, with the average UK citizen drinking around 2 cups each, with 63% of the population drinking it regularly. This statistic showcases, in a stunning upset, that coffee has also eclipsed tea as the favorite hot drink in the UK. It’s also worth noting that 80% of people who visit coffee shops tend to so weekly at least, with 16% of Britons visiting daily

Tea Consumption: In the UK, the average consumption of tea outside the home was around four milliliters per person in 2021/22 – indicating people are more likely to drink tea at home. It’s also worth noting that younger consumers are falling out of love with traditional tea in general.

At-Home Drinking: It’s also worth noting that coffee consumption has overtaken tea by almost double at home. 533 million packs of at-home coffee and 287 million packets of tea were sold in the UK over the year up until March 2023 according to Kantar, showing that coffee dominates in both spaces.

Specialty Coffee: Specialty coffee has become a massive element in the cafe economy, however, some studies indicate its importance to consumers is reducing every year. It appears that general increases in quality have more to do with customer retention and engagement than highly specific offerings.

Whichever way you slice the cake (or pastry), coffee is on the rise in the UK, becoming THE hottest hot drink in our country’s economy. With the ever-increasing availability of different coffee drinks, the growing demand for quality beans, and the highly-motivated society of today, this highly caffeinated, always versatile drink sits firmly at the top of the game.

The Growing Space of Independent Coffee Shops

Despite challenges, there may be no better time than now to try and open a coffee shop in the UK. While the major coffee brands are still thriving in the post-pandemic world, it’s the independent coffee shops and cafes that are truly on the rise in the UK. The independent coffee shop market value, made up of 12,212 stores across the country, was valued at around £4.6 billion in 2024. In the last year, sales growth in the sector has increased by 4.1%, with the overall market value growing by 2,2%.

People have been leaning towards independent coffee shops due to their capacity to provide high-quality coffee, personalized services, authenticity, and locality. It’s also worth noting that post-COVID Britons feel more of a kinship with small businesses, even feeling responsible for helping them stay open sometimes.

Mobile Coffee & Tea Businesses

Mobile coffee and tea businesses are also on the rise, with many entrepreneurs enticed by the space’s low start-up costs and high potential for profit margins. Ready-to-go mobile coffee franchises can be bought for as little as $7,500, offering a year-round business opportunity with the flexibility to be moved around easily. Starting a coffee shop on wheels might well be the pathway to financial freedom.

Where is the Cafe Industry Headed?

So knowing where the Cafe Industry is today, where might this nation’s ‘coff-economy’ end up in the next few years? Based on what we’ve investigated in this blog, there are some clear outcomes that are easy to predict for the near future of the cafe industry.

The cafe industry will continue to recover and grow in the time following COVID-19, even if it’s still a few years behind where it was before.
Branded, independent, and mobile coffee shops are set to continue expanding and increasing their profits in the next few years.
Quality coffee and premium service are growing in importance every year, which applies when considering in-store and at-home drinks.
Boutique bakeries are building an ever-growing reputation within the industry, and their influence is likely to continue bleeding into smaller shops and brands.
Sustainability is playing a bigger part across industries, meaning we’re likely to see an increase in eco-friendly containers, ethical beans, and waste minimization.
Hospitality technology is rising with EPOS, workforce management, and personalization tools becoming more prevalent in coffee shops and beyond.

If you want to engage with the cafe industry in the most meaningful, effective way possible, you should attend this year’s Cafe Business Expo! This trade show and industry conference is Europe’s leading event dedicated to cafe business owners, showcasing the sector’s latest developments while platforming some of its leading minds as guest speakers.

Cafe Business Expo is the perfect place for professionals eager to learn more about the state of cafes in the UK and the technology powering them. It’s also a hotspot for all hospitality professionals, being co-located with 6 other shows as part of The Hospitality B2B Portfolio, meaning with one free ticket, you can get a comprehensive view of hospitality in the UK today.