How to beat the slump in coffee shop profits

Johnson Reed
2m read

It may be hard to believe, if you’ve ever queued at a Costa coffee shop in a motorway service area on a busy bank holiday weekend, but coffee sales have slumped over recent years. According to a recent industry report by Allegra Strategies, they’ve revealed a surprising fact that they think hasn’t been recognised by the coffee shop market as a problem.

Their research shows that in 2009 the average spend in coffee shops was £3.50. Last year however, the average spend decreased by 32p to £3.18 per transaction. That’s a fall of more than 10 per cent in two years, which means that, assuming coffee shops aren’t generating new customers, they’re actually suffering a fall of 10 per cent in sales.

Certain marketing gurus, notably John Richardson and Hugh Gilmartin, known as the COFF£E BOYS, reckon that they have some answers to the problem – particularly with their insight into the ways that customers behave when presented with prices in different formats and in relation to other items. They even claim that they suggested that Gordon Ramsey changed a product for sale to coffee shops, and he listened and made the changes.

At Johnson Reed however, we have our own theories on remedying this apparent downturn in spend per head. We are experts in the field of equipment finance for the catering market. Past experience has told us that a viable way to generate new customers is to invest in new kit, which keeps up with technology as well as lessening the pain of waiting in queues for your next caffe latte. By acquiring the latest machinery, you can spread the cost across its working life and pay for it as you go, with a lease finance deal from Johnson Reed. Or you can go to the lads’ marketing masterclasses, look at their videos, and decide for yourself whether they know better than we do.