U.K.'s Thirst for Coffee Shows No Sign of Stopping

The U.K. led growth in branded coffee shops in Europe for a third straight year amid an expansion of chains from Starbucks Corp. to Costa Coffee Ltd.

The number of outlets in the U.K grew by 643 to 7,421 in 2017, according to market researcher Allegra Strategies Ltd. The country drove net outlet increases in Europe, followed by Turkey, Russia and Greece, the company said in a summary of its annual report.

Traditionally a nation of tea drinkers, the U.K. has been a leading market for branded coffee shops in Europe since Allegra’s data began in 2010. Still, 21 out of 25 countries in Europe saw expansion in their market this year, the researcher said.

"The UK is the most developed market and remains the model for the branded coffee shop industry," Allegra said.

There were 22,714 coffee-shop outlets in Europe in October, up 6.4 percent in 2017. In percentage terms, Romania had the strongest growth, expanding 30 percent, with Poland the next fastest. In contrast, Spain, Bulgaria and Austria had the largest net contractions.

"Despite a sustained period of political uncertainty, consumer confidence is relatively stable and out-of-home coffee consumption is increasing," Allegra said.

Costa is the largest chain in Europe, followed by Starbucks.

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"Allegra anticipates the market growth to continue at a steady rate with key opportunities lying in countries where international chains are influencing the expansion of domestic brands," the company said.