Independent coffee shop sector burgeoning, report shows

Three quarters of independent coffee shops saw like-for-like turnover increase in 2015 compared to 2014. 

Nearly a third (31.1 per cent) report having seen an improvement of 20 per cent or more, according to a survey by the Caffè Culture Show. 

Nine in ten (92.3 per cent) expect growth to continue in 2016 compared to 2015, with a quarter (24.7 per cent) confident that their business will perform at least 20 per cent better than in 2015. 

Almost a quarter (24.6 per cent) report an average turnover of £200,000+ per outlet in 2015.

Owner ambitions for the next two years are clear and the focus is growth, with three quarters (75.1 per cent) planning to increase their customer numbers, 72 per cent to improve their profit margins and more than a third (36.5 per cent) to open more outlets.

Three in ten (31.2 per cent) plan to invest over £10,000 in their business this year, with equipment (64.5 per cent), interior design and furnishings (50.5 per cent), marketing and staff and training (both 45.1 per cent) the top priorities.

Coffee sales have been the biggest growth area for independent coffee shop owners in the last 12 months (50.5 per cent), followed by lunch (41.9 per cent) and breakfast (26.8 per cent).

One in three sells over 500 cups of coffee a week with one in eight (12.9 per cent) selling twice that.

Latte is by far the best-selling coffee beverage (60.2 per cent) followed by flat white (26.2 per cent). Asked to predict the big consumer trends for the coming twelve months, owners overwhelmingly cited rising demand for healthier options like low sugar and ‘Free From’ food and drink products.

Providing great customer service (29 per cent) and the best quality cup of coffee possible (13.9 per cent) matter deeply to café owners, but it’s profitability that matters most (30.1 per cent). 

Some are doing better than others in this respect, with 37.6 per cent saying making a profit is the biggest challenge facing their business when starting out, and more than half (51.6 per cent) say making a healthy profit is still a major challenge now.

Despite their ambitious investment plans and confident outlook for growth, more than a third of owners (35.4 per cent) admit they have no formal business plan in place for the current stage of their business and less than four in ten (37.6 per cent) have a solid weekly or monthly profit and loss reporting system in place.

Caffè Culture Show event director Cheryl Carroll says the findings paint a positive picture of the UK’s buoyant independent coffee shop sector, with no sign of consumer appetite waning.

‘Growing demand for healthy food and drink options is a trend we’re definitely seeing reflected at the Caffè Culture Show with an increasing number of low fat, low sugar, gluten and allergen-free ranges on offer,’ she adds.

Caffè Culture Show speaker John Richardson says that while consumer demand for independent coffee shops is undiminished, profitability remains a real challenge for owners. 

‘The dream of opening a coffee shop is attractive but the realities of juggling employment law, financial management, operational and training systems, and long working long hours can bite hard. 

‘Sadly there are many owners who have an unsustainable business model and our focus, along with the Caffè Culture Show, is to provide advice and support to help independent coffee shops thrive.’

Further reading on independent shops

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