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Full of Beans...The Coffee and Sandwich Shops Market Continues to Perform Well Despite Recession

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A new Market Assessment, Coffee & Sandwich Shops, published by marketing intelligence provider Key Note focuses on the coffee and sandwich shops market in the UK, an industry which has performed very well despite a chilly economic climate. The Assessment provides market intelligence on a number of key areas of the industry, including coffee shops and sandwich shops, as well as profiles of some of the UK's most prominent operators. Further key data is included in the report, such as exclusive market research commissioned by Key Note in 2011, which investigates consumer opinions regarding coffee and sandwich shops. This research revealed that almost half of those surveyed had visited a coffee shop or a sandwich shop in the previous 3 month, thus giving some idea of the market's strength.


Despite the recession and the subsequent downward pressure on UK growth, a symptom of which has been high unemployment, the number of coffee and sandwich shops grew between 2009 and 2010. In 2010, the top 12 brands of coffee shops had 3,041 outlets between them, while the top 12 brands of sandwich shops totalled 3,748. These are dominated by the coffee chains Starbucks, Costa and Caffè Nero and, the sandwich chains, Greggs and Subway.


Expansion of the market has been rapid and prolonged, with the recession having only the slightest effect on this trend in 2009. The London and South East markets have become more saturate and, as a result, key expansion areas have sprung up in the rest of the country, where brands are competing for market share.


The market benefits from a high level of consumer retention despite the economic downturn, with Key Note's exclusive market research revealing that less than a third of respondents have cut back on visiting a coffee or sandwich shops due to the recession. Demand is therefore not falling at a sufficient enough rate to prevent or curtail the current expansion of the market.


The popularity of coffee shops is further highlighted by the fact that so many retailers now have their own coffee shop kiosks, particularly in supermarkets and other locations with high square footage. However, recently there outlets have refrained from including branded coffee and sandwich shops in their stores; with many retailers now increasingly incorporating their own generic in-store cafés, which are run by the stores themselves rather than an outside chain.


It is not just the UK which sits in the crosshairs when it comes to the expansion of the market; many foreign markets are also being targeted by the chains, which are currently making much headway in the UK. The Asia-Pacific region in particular holds particular importance, as does the Eastern European market.


Having survived the worst of the recession relatively unscathed in most cases, the major coffee and sandwich chains are likely to continue to expand, with the only caveat being that perhaps it will be a more cautious expansion than would have previously been undertaken before the recession. Indeed, a number of the major chains did cut back outlet expansion during the economic crisis, with some, such as Starbucks, closing stores in a number of locations across the globe. However, with the worst now expected to be over and tentative hints of overall growth in 2012 for the UK economy to look forward to, it is likely that a number of the larger chains will return to concentrating on expansion, possibly at the expense of some of the smaller, independent chains. By 2015, Key Note is predicting that store numbers for branded coffee shops will reach 3,800, while the number of branded sandwich shops will grow to 4,511 over the next 5 years.



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Press enquiries: Jack Sykes at Key Note at or 0845 504 0452. Press/review copies of the report are available on request.