UK Coffee Shops in 2021

The past 18 months has been one of the most challenging trading times for every UK high street business, and your local coffee shop is no exception.

The World Coffee Portal’s industry-leading report on the UK branded coffee shop market (the big players like Starbucks, etc.) says that coffee shops suffered a near 40% sales decline over the last 12 months. They are putting it back to 2013 levels.

We have now seen the first fall in the number of Greater London-based coffee shops in 20 years.

A massive reduction in people’s daily commutes has decimated footfall at stations and city centres. Some neighbourhood outlets have benefitted from increased levels of home working, as more customers stay local.

Every shop has had to close and lose profits in the past 18 months, and while they may have had rental holidays, these are coming to an end and must be repaid, cutting into any profits moving forward.

Post-Brexit, there is a massive drop in some labour markets. With retail & catering being particularly hard hit, people are unwilling to return to lower-paid roles. Many businesses who built business models on hiring at minimum wage now realise that this model is no longer valid, and many might go to the wall.

Coffee prices are also rising, not just off the back of low yields in some areas, but a massive rise in shipping costs due to disputation caused by the past 12 months of COVID disruptions in ports worldwide.

Independent coffee shops are amongst the hardest hit. Many are small family operations that tend to have slimmer profit margins and do not have the deep pockets of global brands to rely on and smart accountancy practices to offset any losses.

Here at the Coffee Advocates, we speak to local independent coffee shops every day.  And while most are optimistic about the future, they know that the next 12 months will be more challenging than ever before; owners will be working longer hours to cover staffing shortages, with much reduced profits, due to the higher overheads.  

Suppose we all try to spend a little more money at your local coffee shop and try to avoid the big players – (although they have a part to play in supporting local employment).  We can help support local businesses and keep our high streets alive.