Coffee shops jostle in crowded UK high streets

* Industry seeks to build frequency of customer visits

* Coffee culture here to stay

By David Brough

LONDON, April 22 (BestGrowthStock) – Innovation will be essential to
prevent saturation in the crowded UK coffee shop industry,
senior executives said on Thursday.

Executives attending the two-day UK Coffee Leader Summit
said an improvement of the customer experience, introduction of
new products such as the “flat white” coffee, and progressive
customer loyalty strategies were vital to push future growth.

Britain’s high streets are populated by several coffee shop
chains, such as Starbucks (SBUX.O: ), Whitbread Plc’s (WTB.L.: )
Costa Coffee and Caffe Nero, as well as independent retail
outlets, as coffee drinking culture has become more mainstream.

According to Paul Ettinger, head of international food and
beverage at Caffe Nero, London has 3.6 coffee shops per 10,000
people, compared with 1.8 in the UK as a whole and 2.5 in
Seattle, home of Starbucks.

“That would indicate that there may be a few too many
(coffee shops) in parts of London,” Ettinger said.

He said he expected growth in the coffee shop sector to slow
but ruled out a market decline.

“We’re here to stay,” he said.

John Derkach, managing director of Costa Coffee, said that
on average Britons visit coffee shops around 8 times a month,
and that 47 percent of UK adults visit a coffee shop each month.

“This means that about half the people don’t visit coffee
shops,” Derkach said.

“That’s a tremendous opportunity for our industry.”

Derkach said the coffee shop industry needed to work on
building the frequency of customer visits.

However, he said the industry needed to be more innovative
to trigger growth.

“The rate of change (innovation) is nowhere near enough to
keep up with a maturing industry,” he said.

Starbucks, the first chain in the UK to serve the “flat
white”, is focused on refreshing stores to lure customers,
improving the customer experience, introducing new products and
providing good-quality coffees, senior executives said.

“The trend for good quality is unstoppable,” said Amanda
Royston, Starbucks’ head of marketing in the UK and Ireland.

“Quality is something that people are willing to pay for.”

U.S.-based chain Starbucks (SBUX.O: ) plans to open more than
50 coffee shops in the UK and Ireland in 2010, its Managing
Director for the UK and Ireland, Darcy Willson-Rymer, said on
Thursday. [ID:nLDE63L188]

Stock Market Research

(Reporting by David Brough. +44 (0) 7990 568064. Editing by
William Hardy)

Coffee shops jostle in crowded UK high streets