Coffee chains weather the recession

Coffee shops have been expanding during the recession according to new research, despite concerns that consumers would cut back on buying designer coffee in the downturn.

The report from The Local Data Company claims that the six leading coffee chains, including Starbucks, Costa Coffee and Café Nero have increased outlets by 47% in the past year.

According to the report the sector reported 3% total growth which is expected to increase to reach £2bn in consumer spend by 2012.

The report says the growth has been driven by “an influx of newly-redundant businessmen with laptops and Blackberries making use of the cheap, connected space offered by coffee shops”.

It comes despite the varying fortunes of coffee chains in the last 12 months.

Starbucks reported same store sales were down 5% for the three months to 28 June, while Costa Coffee reported total sales up 18.5% year-on-year and same store sales up 2.6% for the same quarter.

During the year, the Coffee republic and BB’s coffee chains went into administration.

Independent coffee shops dominate the sector with 70% market share, and 9,441 outlets compared to 2,000 outlets operated by chains.

Costa Coffee is the largest chain with nearly 1,000 outlets, followed by Starbucks which operates 750 outlets, and Café Nero which operates 450 stores.

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