In 2000, former British prime minister Tony Blair described his vision of a British cafe society. Since 1997, the coffee shop market has grown 10-fold, doubling in size in the past six years. The Project Cafe 2012 report says there are now 15,723 coffee shops in the UK.
According to Jeffrey Young, director of Allegra Strategies which produced the report, Britons are increasingly making the coffee shop a part of their daily lives. The report found that one in five consumers visit a coffee shop every day, compared with one in nine in 2009.
"The UK coffee shop market continues to astound even the most optimistic of forecasters by growing significantly in value, in outlet numbers and also in the social psyche of the nation. Britain has become a new nation of coffee drinkers," he says.
The three leading chains account for 54 per cent of the market - Costa Coffee has 1522 outlets, Starbucks has 752 and Caffe Nero 530.
But forecasters believe there will be increased competition as Harris and Hoole, which is part-owned by UK supermarket Tesco, Coffee#1 owned by Brains brewery and Greggs Moment, enter the market.
The increased competition will lead to a 25 per cent growth in coffee shops over the next five years, the report predicts.
Many independent coffee shops will be forced out of the market, the report forecasts, but strong independents will do well.
Said Young: "The focus on quality in all areas can only continue to drive a thriving industry over the next three to five years and beyond. The entry of new players signals a new era of competition about to emerge, with quite possible merger and acquisitional activity."
People use coffee shops for different reasons.
Audrey Gill, 80, said: "I'm on my own now, so it's nice to go to a place where people are so friendly. These places didn't exist before and now there are so many to choose from."
In St Neots, Caffe Nero dominates the market square and a new Costa Coffee has opened in the high street. Paul Kavanagh, 53, had just finished work as an administrator.
"It's nice to unwind. They have free Wi-Fi. I like to come here and watch the world go by. It's better than sitting at home," he says. But it has taken him some years to get used to the concept. "I didn't like these kind of places at first but, like everyone else in the country, I have grown to accept them."
Meanwhile, the Campaign for Real Ale estimates 18 pubs close in Britain every week. The trends are only indirectly related. People do not want to drink coffee in a pub or alcohol in a cafe. The prospect of French-style cafes where customers are as likely to order a coffee as a beer or a pastis seems unlikely in the UK in the near future.
"In a coffee shop you have a convivial atmosphere without the alcohol or the rowdiness. I would not go to the pub for a coffee, I would go for a pint," says Kavanagh.
Next door, the Corner House Bar has a similar number of customers, drinking wine and beer. The landlord, Omar Tahiri, says he has an espresso machine and buys expensive coffee beans but only sells four coffees a week. "If you want a coffee, you go to a coffee shop. The pub is for other things," he said.
The main reason for the closure of so many pubs is the opening of pubs by large corporations such as JD Wetherspoon which sell alcohol cheaper than competitors. "I have lost 50 per cent of my business to Wetherspoons - coffee shops haven't affected it at all," he said.
Cafe grande
7.5 per cent growth in UK coffee shop market this year
£5.8bn business
15,723 coffee shops
-Observer
