According to a recent Mintel report the market for branded coffee shops will increase by 52% from 2006 to 2011. The profile it follows will be something like this.
- 2006 – £675 million
- 2007 – £736 million
- 2008 – £801 million
- 2009 – £874 million
- 2010 – £948 million
- 2011 – £1.02 billion
The big three – Starbucks, Costa and Caffe Nero currently make up nearly 60% of the shops and I see no reason why they won’t continue this split as we move forward. But that only provides a bigger opportunity for small local cafes and small chains to prosper. The joy of being small is you can move faster, work more creatively and provide a friendlier option for the coffee consumer – but, and it’s a big “but” only if you can manage to stand back and work hard on your business and not work in it relentlessly.
The Big Three are simply going to get better at what they do. They are going to improve every aspect of their business since they have whole departments dedicated to this. Their human resource departments are working hard to train and retain better staff, the marketing departments are working hard to keep the brand in front of the customer and the finance and buying departments are constantly striving to buy cheaper and put more money to the bottom line. Whether you have one, two or twenty sites you must keep thinking the same way.
So that’s the good news – those are the good facts about our growing industry. The bad facts are that small operators are closing down every day and, although there are no clear statistics for this yet, we have to assume that our closure and success rates are very similar to the classic restaurant business. i.e. 85% – 90% of them will fail.
So once again you have to make sure this isn’t you by working your business all the time. You must stand back and realise that it is a business and not a hobby. The first three chapters in our book drum this home and then drum it home again.
Make sure you are part of the £1 billion statistic in 2011 and not part of the 90% failure statistic. Failing in business isn’t fun. I know.