Caffè Nero Group now holds a 10% share of the UK branded coffee shop segment | Photo: Tony Monblat

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Caffè Nero has become the majority owner of Coffee#1 after acquiring a near 70% stake in the Cardiff-based coffee chain. The shares were purchased from Welsh brewer and retailer SA Brain, which has owned Coffee#1 since 2011 and will retain around 30% of the business.

Founded in 2001, Coffee#1 has built a 92-store UK portfolio, making it the fourth largest coffee-focused branded chain in the UK after Caffè Nero’s 683 stores. The purchase means Caffè Nero Group commands a 815-store UK portfolio, holding a 10% share of the total UK branded coffee shop market.

“We are delighted to welcome Coffee#1 into the Caffe Nero family,” said Caffè Nero founder and chief executive, Gerry Ford. “It is a fantastic brand with an emphasis on great coffee and service combined with a community-based feel that matches the ethos of Caffè Nero Group perfectly. Coffee#1 will continue to operate regionally and grow alongside the Caffè Nero brand,” he added.

In 2002 Caffè Nero purchased all 23 of the now defunct Aroma coffee chain from McDonald’s for £3.5m, opting to assimilate the brand into its own portfolio. In 2016, Caffè Nero acquired the 43-strong Harris+Hoole chain from Tesco for an undisclosed sum, this time opting to operate the brand alongside its own. Today the group operates more than 1,000 stores across ten countries.

SA Brain chairman John Rhys added: “The board has resolved now is the time to join with a major player in the coffee market to take it to the next stage of its development. As significant shareholders in the business, we look forward to seeing Coffee#1 continue to grow and prosper within the Caffè Nero family.”