16 December 2019 | UK

Caffè Nero eyes further international expansion as group sales rise 11%

UK’s third-largest branded coffee chain records 86 consecutive quarters of like-for-like sales growth, but losses widen amid new acquisitions and plans to open 80 stores worldwide in 2020

Caffè Nero Group intends to open 80 stores across its international brand portfolio in 2020



In its full-year results for the 12 months ending 31 May 2019, Caffè Nero revealed group sales rose 11% to £366.1m, up from £334.4m the previous year. Like-for-likes increased 3.1%, up from 2.5% in 2018, marking 86 consecutive quarters of sales growth since the coffee chain was founded by entrepreneur Gerry Ford in 1997. Pre-tax losses, however, increased to £30.2m compared with £8.6m the previous year.

In January 2019 Caffè Nero acquired a majority stake in 90+ café chain, Coffee#1, propelling its share of the UK branded café market to around 10%. However, sustained tough trading across the UK saw Caffè Nero close 19 UK stores over the last 12 months, with World Coffee Portal research revealing UK branded coffee shop outlet growth slowed significantly from 8.7% in 2018 to 0.9% in 2019.

“Our positive sales performance is testament to our continued belief that investing in the quality of our coffee and our people is key to our success. Despite a challenging environment for hospitality, we’ll continue to invest in delivering a premium experience for our customers and in growing our estate through creating welcoming and vibrant coffee houses,” said Caffè Nero founder and Chief Executive, Gerry Ford.

Despite difficult trading in its flagship UK market, where it has nearly 800 stores, Caffè Nero continues to expand internationally, operating a total of 1,026 stores across 11 territories.

In Turkey, Caffè Nero opened four net new stores for a total of 60 outlets in the country. In the US, a market British coffee chains have frequently found challenging to navigate, Caffè Nero opened seven sites in Massachusetts and Connecticut in the year to 31 May 2019, bringing its total US store count to 29.

2019 also the group also enter the Swedish market after acquiring 11 stores from Coffeehouse by George.

The store openings created 400 new jobs across the coffee chain’s global portfolio, bringing its total to around 9,000 staff. Caffè Nero Group intends to open 80 stores across its international brand portfolio in 2020​.
 

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