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Allegra report details rise of independent cafés in the UK

by Staff Writer
July 9, 2019
in News
Reading Time: 3 mins read
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Independent coffee shops face formidable challenges in the United Kingdom’s toughening retail climate, according to Allegra World Coffee Portal’s Rise of Independents UK 2019 report. However, Allegra CEO Jeffrey Young says those distinguished by outstanding coffee and customer service have the potential to thrive. “There’s no doubt independent coffee shops face an uphill struggle compared to scaled competitors,” Young says. “But those independent cafés defined by razor-sharp menu quality and seamless, highly personalised hospitality face a very bright future indeed. I’m highly excited to see what the innovation a new generation of independent businesses bring to the market over the next few years.” The Rise of Independents UK 2019 is World Coffee Portal’s first dedicated report on the UK’s independent coffee shop segment. The research reveals 7022 independent cafés operae in the UK, with an estimated value of £2.4 billion (about US $3 billion).

The report records four per cent annual outlet growth for UK independents over the past 12 months, representing an estimated 260 net new sites. Allegra forecasts the segment will exceed 8000 outlets by 2024, growing at compound annual growth rate of three per cent.

Allegra estimates UK independents serve more than 10.5 million cups of coffee each week. But with branded chains often competing on location, convenience and price, independents need to ensure their proposition is pitch-perfect every time to entice premium consumer spend.

Rising labour and property costs are perceived as the greatest challenges facing independent coffee shops in the UK, ahead of business rates, and increasing competition. Despite the challenging retail environment, 80 per cent of independent coffee shop leaders surveyed by Allegra in March 2019 reported positive sales performance in the past 12 months, with a majority citing coffee and service quality as key success factors. Three-quarters of industry leaders surveyed believe there is still plenty of growth potential for independent coffee shops in the UK.

Allegra research shows more than 70 per cent of independent café consumers surveyed purchase coffee to drink in-store, compared to 56 per cent of branded chain customers. A further 21 per cent of consumers surveyed choose independent coffee shops based on service quality, compared to 16 per cent at branded chains. Similarly, 18 per cent view atmosphere as the greatest impetus behind their visit, compared to just eight per cent at branded chains. This indicates independents can compete effectively with highly refined, personalised in-store experiences that foster neural loyalty through community-based concepts. Longer dwell-times also present an opportunity for menu diversification, such as single origin coffees, non-dairy milk and vegan options, which are more likely to appeal to consumers under 30. Forty per cent of this group surveyed indicate they are drinking more coffee at independents compared to a year ago, making them a key marketing demographic. Global Coffee Report has launched a LinkedIn Showcase page. Follow HERE for up-to-date news and analysis of the global coffee industry.

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