Joining the café society
The retail landscape has always been in a state of change but over the last 10 years the rapid success of branded coffee bars has not only changed the look of the high street and shopping centre, but changed society as well
The British today are more likely to visit a coffee shop for socialising, eating or business meetings than ever before. There are approximately 3,000 branded outlets and Allegra Strategies predicts that the market, now worth around £1.3 billion, will grow by approximately 8 per cent a year.
This has brought a welcome new opportunity for business people wishing to share in that success. Originally a feature of the London scene, coffee culture has spread to smaller towns all over Britain and new types of outlets such as leisure locations and petrol forecourts.
Allegra Strategies reports that 47 per cent of adults visit coffee shops at least once a month and 24 per cent visit coffee shops weekly, while 12 per cent order takeaway at least once a week. While there is still a place for the independent coffee bar owner, consumers have demonstrated that they like to patronise outlets they know and can trust, so the chains have expanded to meet this demand. For example, BB's Coffee & Muffins has doubled its number of outlets to 180 in just three years.
Becoming a franchisee of a chain brings a number of significant benefits. At a time of scarce credit, banks are much more likely to loan to a franchisee of an established franchise. For example, they can see the BB's business model working for themselves and so there is less of a risk.
It is easy to get it wrong when starting up a business on your own - for instance you won't have access to the best suppliers or the economies of scale of bulk buying. Above all, for those entering the business for the first time, training is critical - particularly when you are handling food. People are much more discerning about coffee and making a good espresso-based drink is an art. Your franchisor should guide you with all aspects of operations and provide strong marketing support for the franchise as a whole.
An increasing number of customers will want to order food and in fact the food-focused chains are showing faster growth than the sector where coffee drinking is the main focus. So when deciding which franchise to choose, look carefully at the food offering for the various brands. We are increasingly a society 'eating on the hoof' so people are looking for good quality, good value lunches and snacks.
A coffee café franchise is ideal for franchisees who wish to establish a single outlet and those who wish to own a portfolio. Consumers are willing to pay a premium price for good coffee, so a coffee outlet offers a good return on investment. But franchisees must be prepared to work hard to market locally, ensure that the ambiance of their store is welcoming, customer service is exemplary and that quality is high. The rewards are high not just in terms of profit but in working in a growing industry and serving the public products which they can enjoy.
Reported by Phil Abbott