According to research from leading insights consultancy Kantar, in 2017 UK consumers spent £49 billion on eating and drinking out of home – and that’s not including alcohol. More than 98% of people made a convenience or luxury out-of-home food or drink purchase last year, which includes everything from a slap-up celebratory meal to a takeaway coffee or prepacked sandwich to eat at their desks. Convenience and treats are big business. It might be, though, that big businesses are the ones cashing in more effectively, rather than independent coffee shops, sandwich bars and eateries.
More than half of all coffee bought at pastry chain Greggs was bought as a one-off purchase. Wetherspoons’ coffee sales have risen more than 25% and big-name bakeries and lunch providers are selling more coffee too – with growth outstripping dedicated coffee shops (5.1% growth against 4.5% growth for the traditional). At the same time, we’re spending less on quick-fix lunch convenience, with finances believed to be the reason we made 274 million more home-made lunchtime pack-ups during 2016-2017. We’re saving for dining out.
But while evening meals at pubs, chains and independent restaurants are the three biggest growth areas of out-of-home spending, coffee shops came in fourth, growing at more than £300 million in 2017. That’s not just down to coffee; it’s down to coffee shops offering more choice of food and cold drinks alongside their core offering. Consumers are actually drinking less coffee – they’re just spending more on it, as prices rise.
The challenges for independent coffee shops and eateries remain what you’d expect: the big coffee retailers, big convenience food retailers, and tightening purse-strings. So, what can you, as the owner or manager of a small business, do about it? More of the same, if you’ve been following our blog for advice for coffee shops and businesses. Focus on the quality of your coffee (a big-chain coffee might be massive in volume, but we’ve been in very few independent coffee shops where the quality of coffee taste isn’t vastly superior), lease an economical espresso machine which suits your business model and setting, diversify your additional products, and use every small-business marketing trick in the book.