In this report Mintel will analyse trends in the coffee shop market and look at the changes that have occurred since Mintel compiled its last report on the sector, in February 2002. The market is dominated by the branded coffee chains and, as such, these will provide the report's main focus.

The coffee shop market has expanded rapidly since the early 1990s and this will continue during 2003, despite some accusations that the market is already saturated. When Starbucks entered the UK market, in 1998, the managing director of Coffee Republic, Bobby Hashemi, was quoted as saying that "the UK coffee market was sustainable to 1,500 outlets", a figure that has almost been reached by the branded chains alone. More recently there have been media predictions that, along with health clubs and designer pubs, which share many of the same clientele, the coffee shop boom is over. While it may be true that further expansion in London and certain parts of the South East is untenable, regional expansion is still going ahead and many of the chains are looking at new and innovative locations to increase their market share.

In this report Mintel will analyse trends in the coffee shop market and look at the changes that have occurred since Mintel compiled its last report on the sector, in February 2002. The market is dominated by the branded coffee chains and, as such, these will provide the report's main focus.

The coffee shop market has expanded rapidly since the early 1990s and this will continue during 2003, despite some accusations that the market is already saturated. When Starbucks entered the UK market, in 1998, the managing director of Coffee Republic, Bobby Hashemi, was quoted as saying that "the UK coffee market was sustainable to 1,500 outlets", a figure that has almost been reached by the branded chains alone. More recently there have been media predictions that, along with health clubs and designer pubs, which share many of the same clientele, the coffee shop boom is over. While it may be true that further expansion in London and certain parts of the South East is untenable, regional expansion is still going ahead and many of the chains are looking at new and innovative locations to increase their market share.

As with many other lucrative markets, competition is fierce in order to obtain both customers and prime locations. Not only are the coffee shops competing with one another, however, but with a wide-ranging number of food and drink businesses, including a revitalised in-store catering sector. Largely due to the success of the branded coffee chain, the range and quality of coffee on offer in the UK has improved in recent years, with Mintel's research revealing that cappuccino is now, by far, the coffee of choice in the eating out market. The challenge for coffee shops is to prove that their product is superior and to strengthen their positions in a somewhat overcrowded marketplace.

Other Mintel reports of relevance include:

- Contract Catering, Leisure Intelligence - UK Report, November 2002

- - In-store Catering, Leisure Intelligence - UK Report, November 2002

- - Roadside Catering, Leisure Intelligence - UK Report, September 2002

- - Pub Visiting, Leisure Intelligence - UK Report, August 2002

- - Pub Catering, Leisure Intelligence - UK Report, July 2002

- - Eating Out Habits, Leisure Intelligence - UK Report, April 2002

- - High Street Pubs and Bars, Leisure Intelligence - UK Report, February 2002

and the forthcoming:

- Vending, Leisure Intelligence - UK Report, February 2003

- - Themed Pubs and Bars, Leisure Intelligence - UK Report, April 2003

- - Independent Pubs, Leisure Intelligence - UK Report, May 2003

- - Eating Out Review, Leisure Intelligence - UK Report, June 2003

- - Leisure Venue Catering, Leisure Intelligence - UK Report, July 2003

- - Sandwiches, Leisure Intelligence - UK Report, July 2003

- - Lunchtime Eating Habits, Leisure Intelligence - UK Report, October 2003

- - Internet Cafés, Leisure Intelligence - UK Report, November 2003

- - Catering for the Family, Leisure Intelligence - UK Report, December 2003.