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      • Is your coffee shop going to see a loss of sales?

      • The high street has long been in decline, thanks to the growth in out-of-town retail parks and, more recently, the increasing spend on the internet. Where once we sourced everything we needed from shops around our own town and its neighbours, we now price-check and buy online if availability and costs work in our favour. Yet this doesn’t seem to have affected coffee shops, for the most part. Instead, we’re drinking more coffee than ever out of home, despite the rise in good-quality bean-to-cup coffee machines in offices and easy, DIY coffee machines for the home. But with Costa announcing a 2% drop in like-for-like sales in the first three months of 2018, does this mean the froth on the frappé is failing? Are times getting tougher for cafés?

        Cost blames the drop in sales on reduced high street footfall. Fewer shoppers out spending, in simple terms. The explanation makes a lot of sense. According to information from The Local Data Company for PwC, 5,855 stores closed across the UK during 2017. 16 shops a day. That’s more than at in any year since 2010 and the height of the financial crisis. 11 a day opened, of course, but the data doesn’t include independent shops, so it’s hard to get an accurate picture. It’s worth noting that – initially at any rate – the retail casualties have largely been those whose business could be beaten by online shopping. Clothes, footwear, travel agents and even estate agents. Instead, service-oriented high street businesses, like hair and beauty salons, ice cream parlours, coffee shops and specialist tea shops have all increased in number. So, perhaps all is well…

        The rise in leisure time and our increasing belief that we deserve to get out of the house and enjoy a coffee or a light lunch with a friend are certainly driving this trend. But if one of the country’s top four coffee companies is suffering, albeit to a minor degree, then there’s something in the water. The truth is that the Brexit vote has hit the value of the pound hard, and there’s no sign of recovery two years on, and that means less buying power and higher costs. Some companies have gone to the wall, others have put prices up, and others have taken a long hard look at their retail portfolio and made cuts where necessary. Closed shops, to you and us. Toys R Us, Maplin, Poundworld, Jaeger and Jones the Bootmaker are all gone, and there have been extensive closures from M&S, Debenhams, New Look, Mothercare, Moss Bros, Clarks and Style Group…

        And as purse-strings are drawn tighter, even the service businesses are suffering. We’ve seen closures from Prezzo, Jamie’s Italian and Byron Burgers. Now these are meals out, where eat-at-home service from firms like Deliveroo have had an impact, as well as the rising costs courtesy of the Brexit vote.

        What it amounts to, nobody knows yet. What we can say is that nobody should be complacent (are we ever, in business?) and that great quality coffee, a really positive business image and reputation, a willingness to diversify (ice-cream machine for the summer, perhaps?) and giving your customers the best possible experience will all stand you and your coffee shop in good stead, whatever comes our way. For lots of tips on marketing your café and ideas on winning customer loyalty, browse the previous posts on our coffee blog.