Will coffee shops continue to see growth after Brexit?
Project Café UK 2019 is an annual study conducted by Allegra World Coffee Portal which monitors the UK coffee shop market. Its purpose is to give those invested in the industry an insight into the social and economic contributions of the UK coffee industry. This survey revealed that the ongoing uncertainty caused by Brexit has contributed to frustration in the industry in the past year, with 49% of industry leaders stating that their businesses were being negatively impacted in the lead up to Brexit; only 5% reported a positive impact.
Increased import costs
It is predicted that with a weaker pound, coffee will be 10-15% more expensive to import to the UK from areas such as Ethiopia and Kenya. If this happens, this will likely have an impact on the price consumers pay for coffee.
Pushing up the prices
London’s independent roasters have predicted that Brexit will push up the consumer price of coffee up by 5% to accommodate for increased import costs. They worry that customers are already paying double for coffee in the present day, compared to what they would have paid five years ago. Whilst consumers are willing to pay more now, there’s no evidence to show how they will react to further price increases, especially if larger corporations find ways to keep their prices down.
On the bright side, those in the industry believe that because coffee is so desirable in the UK, any hike in prices won’t dramatically affect the sales due to high customer demand and the convenience of coffee shops.
Continued but slower growth
The group who conducted the study suggested that there’s a strong chance that more growth will continue in the coffee industry, but it’s expected to be at a slower rate. The coffee industry will have to react to and accommodate the changes in the climate following the UK leaving the EU, including changes to the way consumers will spend their money.
For those working in the coffee industry, or indeed any UK-based business owners, the uncertainty in the lead up to Brexit can feel overwhelming at times. If you’re making any changes in this period to prepare for the impact, your insurance policy may well need a review to ensure you’re still covered. At Lockyers we want to ensure that you come out fighting and we’re happy to conduct a free, no-obligation check of your existing policy to be sure it’s up to date and suggest any changes you could make now, or in the future.
Give us a call on 01924 278222.