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Nearly half of Europe’s coffee shop markets shrank in 2020

  • Europe’s 20 largest branded coffee chains control nearly half (48%) of the total market
  • Russia’s Coffee Like, McCafé, and Romania’s 5 To Go, are Europe’s fastest-growing coffee chains, adding 511, 133 and 110 stores respectively in 2020
  • European operators report an estimated average 30% sales decline due to Covid-19 trading disruption over the last 12 months
  • World Coffee Portal identifies 703 distinct branded coffee chain operators across Europe
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Covid-19 has severely disrupted sales across the continent, but the branded coffee shop segment stabilised in terms of outlets, growing 0.9% to 39,308 sites



Project Café Europe 2021, World Coffee Portal’s comprehensive report on the European branded coffee shop market, reveals 18 out of 40 markets suffered net store declines in 2020. Covid-19 has severely disrupted sales across the continent, but the branded coffee shop segment stabilised in terms of outlets, growing 0.9% to 39,308 sites.
 

Nearly half Europe’s branded coffee shop markets shrank
in 2020
 

Covid-19 has caused extraordinary disruption across Europe’s branded coffee shop segment over the last 12 months. The proportion of industry leaders reporting positive trading conditions slumped to 33% – down from 74% the previous year.
 
Eighteen out of 40 European branded coffee chain markets contracted during 2020 as Covid-19 caused significant disruption to out-of-home sales. The UK, Europe’s largest branded café market, contracted 1.9% to 9,159 outlets, Germany suffered a 3.1% decline to 5,490 outlets and Turkey lost net 218 stores for a total of 2,955 branded coffee shops. Spain endured Europe’s largest market contraction, with 133 net store closures shrinking the market by 8.8%.
 

European coffee leaders optimistic for Covid-19 recovery despite uncertainty 

Despite lingering uncertainty over further national lockdowns in Europe, most industry leaders are anticipating improved trading later in 2021. With the UK and many Eurozone economies forecast to rebound in 2021, 60% surveyed expect trading conditions to improve over the next 12 months, with just 20% forecasting a further deterioration in trading.
 
Looking towards a brighter future, 65% percent of European industry leaders surveyed believe there is still plenty of growth potential for branded coffee shops in their country.
 

Major chains continue to dominate the European coffee shop market 

The three largest branded coffee chains in Europe – Costa Coffee, Starbucks and McCafé – comprise 8,756 outlets, holding a combined 22% share of the European branded coffee shop market and collectively expanding by 250 outlets.
 
Twenty of Europe’s largest branded coffee chains control nearly 48% of the total market, with multi-national operators accounting for over 61% of outlets.
 

Branded coffee culture continues to gain traction in Eastern Europe 

Russia has overtaken France as Europe’s third-largest branded coffee chain market, growing 16.5% to reach 3,934 outlets. Romania’s branded coffee shop segment continues to expand apace, growing 29.8% to reach 601 stores and Kazakhstan’s emerging branded coffee chain market grew 20.3% to reach 178 outlets.
 
Lithuania’s small but burgeoning branded coffee shop market was Europe’s fastest growing over the last year, achieving 34.8% growth to reach 178 outlets.
 

European branded café market not expected recover to pre-pandemic levels until at least 2022 

The total European branded coffee shop market is forecast to reach 45,400 outlets by 2025 at 2.9% CAGR.  The coffee-focused sub-segment is spearheading this growth and is expected to reach 28,200 outlets by 2025. The food-focused sub-segment contracted 2.6% by outlets in 2020 and is expected to return to pre-pandemic levels by 2022, with World Coffee Portal anticipating it will grow by 1.5% CAGR over the next five years.
 
Commenting on the report findings, Allegra Group Founder and CEO Jeffrey Young said:
 
We are living in very uncertain and difficult times and the downturn for European coffee shops due to Covid-19 has been profound. Nonetheless, coffee drinking across Europe continues to be a major part of European lifestyles and we expect the market to return to pre-pandemic levels in 2022 – or potentially even 2023.
 
With the continued progress of the vaccine roll-out and recovery from the pandemic, we anticipate European consumers will flock back to coffee venues as highly valued and necessary social experiences.”

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