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Mon 21st Aug 2017 - Quick-service restaurants boost coffee sales three times faster than mainstream shops
Quick-service restaurants boost coffee sales three times faster than mainstream shops: Quick-service restaurants (QSR) have increased their sales of coffee three times faster, at 63%, than mainstream coffee shops since 2008, according to new research by insights firm NPD Group. The findings revealed Britain’s high street specialist coffee chains have increased their individual coffee servings by 21% in the same period. Pubs have also realised the importance of coffee and have increased servings by 18% since 2008. NPD Group said the appeal of coffee has allowed operators to use it as a way of entering new eating opportunities or “dayparts”. As QSR operators have started to invest in coffee for breakfast and snacking, coffee shops have responded by trying to take a bite of their lunch business, which generates more than 50% more spend than that produced by customers who just want snacks. Although coffee shops now generate 27% of their traffic at lunchtime, NPD Group said they have only been able to achieve a marginal increase in their share of food servings to date as a result. NPD Group added with other foodservice operators undercutting the coffee specialists by as much as £1.30 on a regular Americano, they must sell other items to maintain their profit margins. The research showed coffee shops are working hard to boost visits too. By the year ending June 2017, Britain’s well-known coffee outlets had increased visits by 120 million since 2008 to 659 million visits a year, a 22% increase. They have increased visits faster than the wider quick-service restaurants sector, which increased visits by 10% between 2008 and 2017. NPD Group said so far, despite the growing competition, coffee shops have maintained market share to provide 41% of coffee servings in Britain’s QSR sector, a similar level to recent years. Britain’s high street coffee outlets now account for 6% of the visits of the entire British foodservice industry. The research also revealed the importance of coffee to Britain’s leading foodservice operators is evident in the growing concentration of this business. In 2008, the top ten operators together accounted for 26% of all coffee servings in Britain. By year ending June 2017, this had increased to 35%, with leading players consisting of a mix of specialist coffee shops, QSR brands, supermarkets and a pub chain. Cyril Lavenant, foodservice director UK at the NPD Group, said: “Britain’s coffee market is highly competitive, with specialist outlets not just competing against each other but also taking on the high street QSR brands. Quality coffee is now available in a huge variety of locations – fast food restaurants, sandwich shops, bakeries, supermarkets and convenience stores, high street retailers, tourist attractions, and of course petrol stations. It’s no exaggeration to say that offering high-quality coffee is the lifeblood of the British foodservice market. It provides a route for foodservice operators to serve customers from their menu throughout the day, from coffee with breakfast to coffee after a dinner out. Consumers can grab a coffee anywhere, so the message for the specialist coffee shops is that they must stand out to compete. Coffee shop chains tend to look alike and have a similar menu and ambience. If there were no branding outside or inside the shops, it would be difficult for consumers to know for sure which outlet they were in. Some of the new, independent coffee businesses are adopting a fresh approach with brighter, sharper interiors, a more inviting atmosphere and appetising menu boards. What’s fascinating about the coffee market is that we are seeing new independents performing just as well as the bigger, established coffee chains. Consumers want something innovative and even quirky to try, and they believe that local outlets will have a superior range of products. The established brands have become bland. They need to wake up and smell the coffee to take on competitive threats from both extremes of the foodservice sector.”


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