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Europe’s branded coffee chains achieve sustained growth amid challenging economy

World Coffee Portal’s Project Café Europe 2024 report shows the total European branded coffee shop market grew 3.3% to reach 45,008 stores over the last 12 months, with 33 out of 40 major markets achieving net outlet growth amid a challenging economic backdrop
  • Four markets expanded by over 100 outlets – the UK, Russia, Turkey and Spain
  • Germany, Greece, Austria and Cyprus contracted by outlets
  • The top 20 largest European operators, including McCafé, Starbucks, Costa Coffee, Greggs and Caffè Nero account for nearly half of the total branded coffee shop market
  • 42% of European industry leaders surveyed believe the trading environment will improve over the next 12 months

Most European branded coffee shop markets added outlets in 2023 despite high costs and low consumer confidence | Image credit: World Coffee Portal

Most European branded coffee shop markets achieved outlet growth over the last 12 months despite many operators grappling with high operating costs and low consumer confidence, new World Coffee Portal research has revealed. 

As inflationary pressures have eased over the last 12 months, 62% of European industry leaders surveyed by World Coffee Portal indicated positive trading – a 4% year-on-year rise, Project Café Europe 2024.
Major markets, including the UK, Russia, France and Turkey all achieved single-digit outlet growth. Remarkably, Ukraine achieved double-digit outlet growth despite Russia’s ongoing invasion. Germany was the largest market to experience a contraction by outlets, while Greece saw a low single-digit decline in store numbers.
While most operators reported positive sales growth, high costs for raw goods, staffing and lower consumer disposable income remain key obstacles to profitability. With average beverage prices rising faster than annual EU inflation, operators are under growing pressure to demonstrate value-for-money in an increasingly competitive trading environment.
Premium and specialty coffee demand on the rise across Europe
World Coffee Portal’s survey of more than 400 European industry leaders identified the growth of specialty coffee as the major market trend of the last 12 months. Ambitious smaller and mid-sized chains successfully deploying boutique-at-scale models include WatchHouse in the UK, Syra Coffee in Spain, The Barn in Germany and Coutume in France. Dutch specialty operators Anne & Max and Coffeecompany also added stores in an increasingly quality-focused market.
In Scandinavia, premium coffee chains, such as Denmark’s Joe & The Juice, Sweden’s Kahls The & Kaffehandel and Norway’s Åpent Bakeri are competing strongly against scaled international competitors. In Germany’s bakery-focused coffee shop market, many operators are responding to growing demand for premium beverages with revamped coffee ranges.
Iberian operators perform strongly as central and eastern European markets expand rapidly
The Spanish branded coffee shop market rebounded from outlet declines in two of the last three years to become the fastest growing top 20 largest market over the last 12 months – with McCafé, Starbucks and Rodilla all performing strongly. Portugal achieved low double-digit outlet growth, with domestic brand Arcádia the fastest-growing operator.
Meanwhile, Romania’s branded coffee shop segment has continued its transformation into a major European market led by fast-growing domestic operators 5 to go and Ted’s Coffee. Premium out-of-home coffee shop culture also continues to grow in many smaller markets, notably Lithuania and Slovakia.
Sustained growth forecast for the European branded coffee shop market
European industry leaders are cautiously optimistic for the year ahead, with 42% believing the trading environment will improve over the next 12 months. Nearly three-quarters believe there is further growth potential for branded coffee chains in their market.
World Coffee Portal forecasts the total European branded coffee shop market will exceed 46,600 outlets within 12 months, rising to over 52,800 outlets at 3.2% CAGR by March 2029.
Commenting on the report findings, Allegra Group Founder and CEO Jeffrey Young said:

“Branded coffee shops across Europe face significant headwinds with the high cost of goods, staff and property all eroding profit margins for operators. However, despite these challenges, consumer appetite for coffee shops remains robust and demand for high-quality coffee, particularly specialty-grade coffee, is on the rise and creating new opportunities for operators to double down on quality and menu innovation.That being said, it has never been more important for coffee chains to focus on lean, efficient business models and ensure that customers perceive value as the price of visiting a coffee shop continues to rise.”


Project Café Europe 2024 
is World Coffee Portal’s strategic guide to navigating the diverse European branded coffee shop market, providing operators, investors and suppliers with the latest market data and insights to build powerful business strategies — and delivering the crucial information you need to stay ahead of the competition. Download the brochure to find out more and enquire about pricing

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