Eighteen out of 40 European markets suffered net store decline in 2020, according to the Project Café Europe 2021 report on the European branded coffee shop market.
COVID-19 has severely disrupted sales across the continent. The proportion of industry leaders reporting positive trading conditions slumped to 33 per cent – down from 74 per cent the previous year.
The United Kingdom, Europe’s largest branded café market, contracted 1.9 per cent to 9159 outlets, Germany suffered a 3.1 per cent decline to 5490 outlets, and Turkey lost net 218 stores for a total of 2955 branded coffee shops. Spain endured Europe’s largest market contraction, with 133 net store closures shrinking the market by 8.8 per cent.
Overall, the branded coffee shop segment stabilised in terms of outlets, growing 0.9 per cent to 39,308 sites.
Despite lingering uncertainty over further national lockdowns in Europe, most industry leaders are anticipating improved trading later in 2021. With the UK and many Eurozone economies forecast to rebound in 2021, 60 per cent surveyed expect trading conditions to improve over the next 12 months, with just 20 per cent forecasting a further deterioration in trading.
Looking towards a brighter future, 65 per cent percent of European industry leaders surveyed believe there is still plenty of growth potential for branded coffee shops in their country.
The three largest branded coffee chains in Europe – Costa Coffee, Starbucks, and McCafé – comprise 8756 outlets, holding a combined 22 per cent share of the European branded coffee shop market and collectively expanding by 250 outlets.
Twenty of Europe’s largest branded coffee chains control nearly 48 per cent of the total market, with multi-national operators accounting for over 61 per cent of outlets.
Russia has overtaken France as Europe’s third-largest branded coffee chain market, growing 16.5 per cent to reach 3934 outlets. Romania’s branded coffee shop segment continues to expand apace, growing 29.8 per cent to reach 601 stores and Kazakhstan’s emerging branded coffee chain market grew 20.3 per cent to reach 178 outlets.
Lithuania’s small but burgeoning branded coffee shop market was Europe’s fastest growing over the last year, achieving 34.8 per cent growth to reach 178 outlets.
The total European branded coffee shop market is forecast to reach 45,400 outlets by 2025 at 2.9 per cent CAGR. The coffee-focused sub-segment is spearheading this growth and is expected to reach 28,200 outlets by 2025. The food-focused sub-segment contracted 2.6 per cent by outlets in 2020 and is expected to return to pre-pandemic levels by 2022.
Project Café Europe 2021 anticipates it will grow by 1.5 per cent CAGR over the next five years.