Greggs has become the largest overall branded chain in the UK branded coffee shop market, overtaking Costa Coffee, according to Allegra World Coffee Portal’s (WCP) latest Project Café report.
While it is a more food-focused operator, Greggs reached 2,737 outlets, versus Costa Coffee’s 2,707 outlets, bringing it out on top and demonstrating that consumers are increasingly embracing non-traditional coffee locations.
Other food-focused operators, such as Cornish Bakery, Cooplands Bakery, and Wenzels are all investing in a quality coffee offer in order to compete with the traditional coffee chains.
Starbucks remains the UK’s third largest operator, with 1,424 outlets.
Details of the new 2026 report were published in an analysis piece by our sister title, MCA Insight. It found the UK branded coffee shop market added 420 net new outlets over the past 12 months, with the £6.8bn market growing by 3.5% over the past 12 months to reach 12,313 outlets. It is forecast to exceed 12,780 in 2027 and reach 14,380 by January 2031.
Growth among the smaller and medium-sized operators is being driven by the likes of WatchHouse, Blank Street and Gail’s, as quality challenges affordability as the dominant signifier of value, WCP notes.
On-trend menus, which feature iced beverages, matcha and higher-end experiences are also helping certain operators tap into the spending power of affluent young consumers.
However, despite positive growth seen big both big chains and challenger brands, the percentage of operators who described the current trading environment for coffee shops as positive fell from 46% to 37%, year-on-year.
Rising operational costs and economic uncertainty is making profitability increasing difficult, with many operators under pressure to demonstrate value and a coherent market position, WCP heard.
Starbucks increased prices by 17% or more across its drinks range in 2025, while Greggs implemented four price rises last year, detailed the report.
Following record high green coffee prices in 2025, the average price of a regular latte across UK branded coffee shops rose 3.9% to £3.76. These increases have led many operators to focus on improving efficiencies alongside cost reduction.
Commenting on the report findings, Allegra Group founder and CEO Jeffrey Young said: “Despite a challenging trading environment, it’s clear that there are plenty of opportunities for growth in the UK branded coffee shop market. The future will see a greater array of innovative, highly focused and niche operators delivering pitch-perfect offers to discrete audiences.
“Younger consumers are gravitating towards coffee, and there is a vibrant casual hospitality scene for colourful, indulgent iced beverages, often influenced by Asian trends. We’re seeing matcha becoming a much more permanent fixture on UK high streets as well as an incredible array of flavours.
“The very best players will react and adapt to these new realities very quickly. Those that can deliver a flawless brand experience with integrity will find great success in the future marketplace.”
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