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Coffee Shops & Sandwich Shops - Ireland - July 2015

Coffee Shops & Sandwich Shops - Ireland - July 2015

“The market for coffee shops and sandwich shops in IoI enjoys strong usage with eight in ten Irish consumers visiting a coffee shop or sandwich shop at least once in the last three months. A generation of café goers are now at ease using coffee shops to catch up with friends over some lunch or as a place to relax with a cup of coffee. Indeed, as the growing craze for coffee continues to develop the Irish café culture, we could witness more consumers opting for a coffee in a coffee shop as opposed to a pint at the pub.”

– Emma McGeown, Research Analyst

This report answers the following key questions:

What types of coffee shops, café and sandwich shops are consumers visiting?
How is the current economic situation impacting the market?
What products and services attract customers to coffee shops and sandwich shops?
What does the future hold for the Irish coffee shop and sandwich shop market?


INTRODUCTION
Key themes of the report
Definition
Data sources
Abbreviations
EXECUTIVE SUMMARY
Market factors
Figure 1: Consumer spending in cafés and coffee shops, by segment of food and drink, IoI, 2014
Figure 2: Estimated value of the Irish café and coffee shop market, by consumer spending, IoI, NI and RoI,
2010-20
Market factors
The reduced VAT rate in RoI encourages more growth
Consumer confidence is on the rise for all-Ireland economy
Calorie information to be put on all RoI menus
The growing coffee culture benefits coffee and sandwich shops
Companies and innovations
The consumer
Fast food and international coffee shop chains prove most popular
Figure 3: Types of coffee shops, cafés and sandwich shops that consumers have visited in the last three
months for a hot drink, snack or sandwich, NI and RoI, May 2015
Socialising is the most popular reason to visit a coffee or sandwich shops
Figure 4: Reasons why consumers have visited coffee shops, cafés and sandwich shops in the last three
months, NI and RoI, May 2015
Irish consumers crave a greater variety of food in coffee and sandwich shops
Figure 5: Agreement with statements relating to coffee shops, sandwich shops and café shops, NI and
RoI, May 2015
More locally sourced food products expected to generate more footfall
Figure 6: Types of services/offerings that would encourage consumers to visit coffee shops and sandwich
shops more often, NI and RoI, May 2015
What we think
ISSUES AND INSIGHTS
What types of coffee shops, café and sandwich shops are consumers visiting?
The facts
The implications
How is the current economic situation impacting the market?
The facts
The implications
What products and services attract customers to coffee shops and sandwich shops?
The facts
The implications
What does the future hold for the Irish coffee shop and sandwich shop market?
The facts
The implications
MARKET OVERVIEW
Key points
Current VAT rates encourage greater growth in RoI
Figure 7: The VAT (Value Added Tax) rate placed on coffee shops and sandwich shops sales, UK
(including NI) and Ireland, 2011-15
Consumer confidence is on the rise
Figure 8: Consumer confidence index, NI, September 2008-March 2015
Figure 9: Consumer confidence index, RoI, September 2008-June 2015
Figure 10: Financial health of Irish consumers, NI and RoI, May 2015
Calorie contents of all food service menus introduced in RoI
The growing coffee culture in Ireland
At home preparation creates competition for sandwich shops
Figure 11: How often consumers have eaten lunch (eg. bought from a sandwich shop/supermarket)
outside the home in the last three months, NI and RoI, April 2014
Premium and instant coffee encroaching on coffee shop market
MARKET SIZES AND FORECAST
Key points
Irish café and coffee shop market estimated to increase in 2015
Figure 12: Estimated value of the Irish café and coffee shop market, by consumer spending, IoI, NI and
RoI, 2010-20
Figure 13: Estimated value of the Irish café and coffee shop market, by consumer spending, NI and RoI,
2010-20
Drinks make up a larger portion of sales in comparison to food
Figure 14: Consumer spending in cafés and coffee shops, by segment of food and drink, IoI, 2014
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
COMPANY PROFILES AND INNOVATIONS
Key points
Innovations
Protein – A healthy indulgence
All things artisan
Ethnic influence
Scope for more dairy-free alternatives
Figure 15: Types of food avoided due to allergy, intolerance or coeliac disease, NI and RoI, August 2014
Quirky cafes
A place to recharge
COMPANY PROFILES
BB’s Coffee and Muffins
Key facts
Product portfolio
Recent developments
Clements
Key facts
Product portfolio
Recent developments
Costa
Key facts
Product portfolio
Recent developments
Esquires Coffee
Key facts
Product portfolio
Recent developments
Gregg’s
Key facts
Product portfolio
Recent developments
Insomnia
Key facts
Product portfolio
Recent developments
McDonald’s McCafé
Key facts
Product portfolio
Recent developments
Caffè Nero
Key facts
Product portfolio
Recent developments
O’Brien’s
Key facts
Product range
Starbucks
Key facts
Product portfolio
Recent developments
Subway
Key facts
Product portfolio
Recent developments
Tim Hortons
Key facts
Product portfolio
Recent developments
Streat
Key facts
Product portfolio
THE CONSUMER – TYPES OF COFFEE AND SANDWICH SHOPS VISITED AND FREQUENCY OF VISITS
Key points
Fast food chains are the most popular coffee and sandwich shops
Figure 16: Types of coffee shops, cafés and sandwich shops that consumers have visited in the last three
months for a hot drink, snack or sandwich, NI and RoI, May 2015
Figure 17: Irish consumers who have visited a fast food restaurant (eg McDonald's McCafé/KFC), for a hot
drink, snack or sandwich in the last three months, by age of children in the household, NI and RoI, May
2015
International coffee brands are most popular among 16-24-year-olds
Figure 18: Irish consumers who have visited an international coffee shop (eg Starbucks, Costa), for a hot
drink, snack or sandwich in the last three months, by age, NI and RoI, May 2015
Service station concessions significantly more popular in RoI
Figure 19: Irish consumers who have visited service stations concession (eg The Streat/Applegreen), for a
hot drink, snack or sandwich in the last three months, by age, NI and RoI, May 2015
Strong preference to visit coffee/sandwich shops once a week
Figure 20: How often Irish consumers have visited coffee shops, cafés and sandwich shops in the last
three months, NI and RoI, May 2015
THE CONSUMER – REASONS FOR VISITING COFFEE AND SANDWICH SHOPS
Key points
Socialising remains the most popular reason to visit coffee/sandwich shops
Figure 21: Reasons why consumers have visited coffee shops, cafés and sandwich shops in the last three
months, NI and RoI, May 2015
Figure 22: Irish consumers who have visited coffee shops, cafés and sandwich shops in the last three
months to catch up with friends or family, by gender, NI and RoI, May 2015
Coffee breaks prove most popular with students and full-time workers
Figure 23: Irish consumers who have visited coffee shops, cafés and sandwich shops in the last three
months, for a break/coffee break, by work status, NI and RoI, May 2015
Lunch time visits popular among younger consumers
Figure 24: Irish consumers who have visited coffee shops, cafés and sandwich shops in the last three
months, for lunch, by age, NI and RoI, May 2015
THE CONSUMER – ATTITUDES TOWARDS COFFEE AND SANDWICH SHOPS
Key points
Non-specialists encroach on the specialist coffee shop’s market
Figure 25: Agreement with statements relating to coffee shops, sandwich shops and café shops, NI and
RoI, May 2015
Greater variety of food needed in coffee shops
Figure 26: Agreement with the statement ‘I would appreciate a greater variety of food being made
available in coffee shops ’, by gender and age, NI and RoI, May 2015
NI consumers call for longer opening hours in coffee and sandwich shops
Figure 27: Agreement with the statement ‘I would be likely to visit coffee shops/sandwich shops in the
evening more often, if more outlets opened late’, by age, NI and RoI, March 2015
Women most interested in seasonal products
Figure 28: Agreement with the statement ‘I look forward to seasonal coffees /sandwiches becoming
available (eg Christmas coffees, pumpkin spiced coffees)’, by gender, NI and RoI, March 2015
Time-pressed consumers seek self service facilities
Figure 29: Agreement with the statement ‘I would be willing to use a self-service coffee machine in a
coffee shop if it meant that I’d get my coffee quicker’, NI and RoI, May 2015
THE CONSUMER - INTEREST IN PRODUCTS AND SERVICES WHEN BUYING COFFEE OUT OF HOME
Key points
Provenance would help to drive more footfall
Figure 30: Types of services/offerings that would encourage consumers to visit coffee shops and
sandwich shops more often, NI and RoI, May 2015
Offering locally made baked goods
Figure 31: Consumers who think baked goods made using local ingredients or sourced from local
suppliers would encourage them to visit coffee shops and sandwich shops more often, by gender and age,
NI and RoI, May 2015
Rewards app more desired by younger consumers
Figure 32: Consumers who think a smartphone loyalty/rewards app would encourage them to visit coffee
shops and sandwich shops more often, by age, NI and RoI, May 2015
Charging devices
Figure 33: Consumers who think charging stations for electrical devices (eg phones, laptops) at a venue
would encourage them to visit coffee shops and sandwich shops more often, by daily internet usage, NI
and RoI, May 2015
Developments in wireless charging
Drive-thru and pre-order service appeals to convenience oriented consumers
APPENDIX
NI Toluna tables
Figure 34: Types of coffee shops, cafés and sandwich shops that consumers have visited in the last three
months for a hot drink, snack or sandwich, by demographics, NI, May 2015
Figure 35: Types of coffee shops, cafés and sandwich shops that consumers have visited in the last three
months for a hot drink, snack or sandwich, by demographics, NI, May 2015 (continued)
Figure 36: Types of coffee shops, cafés and sandwich shops that consumers have visited in the last three
months for a hot drink, snack or sandwich, by demographics, NI, May 2015 (continued)
Figure 37: How often consumers visit coffee shops, cafés and sandwich shops in the last three months, by
demographics, NI, May 2015
Figure 38: Reasons why consumers have visited coffee shops, cafés and sandwich shops in the last three
months, by demographics, NI, May 2015
Figure 39: Reasons why consumers have visited coffee shops, cafés and sandwich shops in the last three
months, by demographics, NI, May 2015 (continued)
Figure 40: Reasons why consumers have visited coffee shops, cafés and sandwich shops in the last three
months, by demographics, NI, May 2015 (continued)
Figure 41: Agreement with the statement ‘I prefer coffee shops that have unique products on sale (eg
Frappuccino)’, by demographics, NI, May 2015
Figure 42: Agreement with the statement ‘Hot drinks from other shops (eg bakeries, fast food venues) are
better value for money than hot drinks from specialist coffee shops (eg Starbucks, Costa Coffee)’, by
demographics, NI, May 2015
Figure 43: Agreement with the statement ‘I tend to use the same coffee shop/sandwich shop because of a
loyalty card/scheme’, by demographics, NI, May 2015
Figure 44: Agreement with the statement ‘I think that speed of service is more important than friendliness
of staff’, by demographics, NI, May 2015
Figure 45: Agreement with the statement ‘I prefer to use larger coffee shop chains (eg Costa Coffee,
Starbucks) as you know what to expect in terms of quality’, by demographics, NI, May 2015
Figure 46: Agreement with the statement ‘I would be likely to visit coffee shops/sandwich shops in the
evening more often, if more outlets opened late’, by demographics, NI, May 2015
Figure 47: Agreement with the statement ‘I would appreciate a greater variety of food being made
available in coffee shops ’, by demographics, NI, May 2015
Figure 48: Agreement with the statement ‘I would be willing to use a self-service coffee machine in a
coffee shop if it meant that I’d get my coffee quicker’, by demographics, NI, May 2015
Figure 49: Agreement with the statement ‘I prefer to use coffee shops/sandwich shops with table service’,
by demographics, NI, May 2015
Figure 50: Agreement with the statement ‘I look forward to seasonal coffees /sandwiches becoming
available (eg Christmas coffees, pumpkin spiced coffees)’, by demographics, NI, May 2015
Figure 51: Agreement with the statement ‘I prefer to use coffee shops/sandwich shops that use fair trade
teas/coffees’, by demographics, NI, May 2015
Figure 52: Agreement with the statement ‘Brand is more important to me than the price of coffee’, by
demographics, NI, May 2015
Figure 53: Types of services/offerings that would encourage consumers to visit coffee shops and
sandwich shops more often, by demographics, NI, May 2015
Figure 54: Types of services/offerings that would encourage consumers to visit coffee shops and
sandwich shops more often, by demographics, NI, May 2015 (continued)
Figure 55: Types of services/offerings that would encourage consumers to visit coffee shops and
sandwich shops more often, by demographics, NI, May 2015 (continued)
RoI Toluna tables
Figure 56: Types of coffee shops, cafés and sandwich shops that consumers have visited in the last three
months for a hot drink, snack or sandwich, by demographics, RoI, May 2015
Figure 57: Types of coffee shops, cafés and sandwich shops that consumers have visited in the last three
months for a hot drink, snack or sandwich, by demographics, RoI, May 2015 (continued)
Figure 58: Types of coffee shops, cafés and sandwich shops that consumers have visited in the last three
months for a hot drink, snack or sandwich, by demographics, RoI, May 2015 (continued)
Figure 59: How often consumers visit coffee shops, cafés and sandwich shops in the last three months, by
demographics, RoI, May 2015
Figure 60: Reasons why consumers have visited coffee shops, cafés and sandwich shops in the last three
months, by demographics, RoI, May 2015
Figure 61: Reasons why consumers have visited coffee shops, cafés and sandwich shops in the last three
months, by demographics, RoI, May 2015 (continued)
Figure 62: Reasons why consumers have visited coffee shops, cafés and sandwich shops in the last three
months, by demographics, RoI, May 2015 (continued)
Figure 63: Agreement with the statement ‘I prefer coffee shops that have unique products on sale (eg
Frappuccino)’, by demographics, RoI, May 2015
Figure 64: Agreement with the statement ‘Hot drinks from other shops (eg bakeries, fast food venues) are
better value for money than hot drinks from specialist coffee shops (eg Starbucks, Costa Coffee)’, by
demographics, RoI, May 2015
Figure 65: Agreement with the statement ‘I tend to use the same coffee shop/sandwich shop because of a
loyalty card/scheme’, by demographics, RoI, May 2015
Figure 66: Agreement with the statement ‘I think that speed of service is more important than friendliness
of staff’, by demographics, RoI, May 2015
Figure 67: Agreement with the statement ‘I prefer to use larger coffee shop chains (eg Costa Coffee,
Starbucks) as you know what to expect in terms of quality’, by demographics, RoI, May 2015
Figure 68: Agreement with the statement ‘I would be likely to visit coffee shops/sandwich shops in the
evening more often, if more outlets opened late’, by demographics, RoI, May 2015
Figure 69: Agreement with the statement ‘I would appreciate a greater variety of food being made
available in coffee shops ’, by demographics, RoI, May 2015
Figure 70: Agreement with the statement ‘I would be willing to use a self-service coffee machine in a
coffee shop if it meant that I’d get my coffee quicker’, by demographics, RoI, May 2015
Figure 71: Agreement with the statement ‘I prefer to use coffee shops/sandwich shops with table service’,
by demographics, RoI, May 2015
Figure 72: Agreement with the statement ‘I look forward to seasonal coffees /sandwiches becoming
available (eg Christmas coffees, pumpkin spiced coffees)’, by demographics, RoI, May 2015
Figure 73: Agreement with the statement ‘I prefer to use coffee shops/sandwich shops that use fair trade
teas/coffees’, by demographics, RoI, May 2015
Figure 74: Agreement with the statement ‘Brand is more important to me than the price of coffee’, by
demographics, RoI, May 2015
Figure 75: Types of services/offerings that would encourage consumers to visit coffee shops and
sandwich shops more often, by demographics, RoI, May 2015
Figure 76: Types of services/offerings that would encourage consumers to visit coffee shops and
sandwich shops more often, by demographics, RoI, May 2015 (continued)
Figure 77: Types of services/offerings that would encourage consumers to visit coffee shops and
sandwich shops more often, by demographics, RoI, May 2015 (continued)
UK RESEARCH METHODOLOGY
Consumer research
Sampling and weighting
Definitions
Qualitative Research
Further Analysis
Brand & Social Media Research
Trade research
Informal
Formal
Desk research
Statistical Forecasting

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