CityLife

Coffee grows in popularity

PUNTERS are shunning pints for lattes as coffee shops take over from pubs as the new place to meet, as a report shows the industry has frothed to a record £1.1 billion a year business in Britain.

The shops on every corner of every town in the country are seen as more convenient, more welcoming and friendlier than the average pub, particularly for women while the spread of the chains like Costa and Starbucks show no sign of slowing down.

The latest industry figures show that by the end of this year in Britain:

*coffee shops will be worth a record £1.1 billion

*6.25 million cups a week are sold in major chains and independents, double just five years ago.

*there are 8,779 coffee shops including chains and independents

Even the rocketing price of a cup doesn't seem to bother the customers, says the report by analysts Allegra Strategies.

It found the average cup of coffee, from a skinny cap in a cup with wings to a double cupped wet latte with room, rose six per cent in the past year, more than twice the rate of inflation.

Yet research with 7,500 regular coffee shop customers found 70 per cent said price was not an issue.

Taste was a bigger concern and up to 74 per cent stick to their favourite shop even in those High Streets which have several of the chains competing in a limited area.

What makes the current revolution even more remarkable is that five years ago many experts claimed the market was saturated with too many shops.

Since then the number of shops has doubled and so have sales, tomore than six million cups a week and this will rise to 7.5 million cups a week by 2008, said Allegra.

For most chains, people come in to use them in the way they once met up at the pub.

But many claim up to 60 per cent of their customers are women who would probably have been put off by dark and dingy boozers during the daytime.

Instead they, and many younger customers, prefer the leather sofas, comfy chairs and computer-friendly areas of the coffee shop chains.

All day opening for pubs will mean many inns will start to serve coffee and breakfast just to compete, said Allegra.

Its report said: "It is an impressive performance given the challenging retail and economic climate over the past 12 months.

"The coffee bar segment remains one of the few retail sectors with year-on-year sales growth in excess of 10%."

But it is better news for the big chains like Starbucks, Costa, Cafe Nero and Coffee Republic, it added.

"Independent coffee operators, however have experienced declining sales due to growing competition from the chains.

"This market will be increasingly dominated by branded chains. Given substantial consumer demand and opportunities identified in the regions, the UK coffee bar market appears to be far from saturation."