The branded coffee shop market is to double over the next decade to reach turnover of £3bn, with the large chains set to emerge unscathed from the current economic squeeze. Jeffrey Young, managing director of Allegra Strategies, the market analyst, told delegates at the Caffe Culture seminar at London’s Olympia that the branded chain market would be relatively unaffected by the consumer slowdown, as coffee had become part of British society and of people’s lifestyles. The UK's branded coffee shop sector, which currently has a turnover of around £1.5bn, was found to have grown at nearly 15% per annum from May 2007 to the present day, with over 3,400 branded outlets currently in the country. The major players such as Starbucks and Costa Coffee were set to continue expanding to reach over 1,000 outlets in the UK each before long, while McDonald’s McCafe brand was shown to be the fastest growing operator in Europe over the last 12 months. Among the multiple trends emerging in the industry was the blurring in boundaries between the retail and foodservice sectors, with Marks & Spencers’s Café Revive ranked as one the most popular coffee brands. Smaller niche players were, however, taking a growing share of the market, with rising interest in patisserie and gourmet coffee chains, including Patisserie Valerie and Druckers. Young predicted that the coming 12 months would see increasing interest in the coffee sector from venture capitalists, with the high profit margins and growth leading to a number of new deals being done and greater M&A activity over the next two years. He said that investors were interested in sharp, innovative coffee shop concepts. Food cost pressures were likely to mean that some operators would suffer difficult times, although it would also create opportunities for those that embraced the new consumer trends, which included convenience, healthy eating and sustainability. London was still shown to be dominating the sector, with annual growth of between 8% and 10% in the last 12 months, which was stronger than at any previous time in the last decade.