The UK coffee market is changing. The grab-and-go, cookie cutter high street cafés that defined the past decade are losing relevance, while premium, design-led and dwell-time focused formats are growing market share.
The potential sale of Costa Coffee at almost half the price Coca Cola paid in 2018 highlights the scale of the shift. Coffee demand is strong, but the model that dominated is no longer working for consumers.
And with this, Costa has felt the strain. Reports suggest the brand could sell for around £2bn, compared to the £3.9bn Coca Cola paid seven years ago. Coca Cola chief executive James Quincey told investors in July that Costa had “not quite delivered” and was “not where we wanted it to be from an investment hypothesis point of view.”
Buyers including Bain Capital and TDR Capital see potential, but the reduced valuation reflects how much the landscape has moved.
Legacy brands try to adapt
In response to this consumer shift, chains are reworking their formats to encourage longer stays and higher spend. Costa’s Great Portland Street store redesign placed baristas at the centre of an open counter with softer lighting and artwork.
Nick Ridley, property & store development director for UK&I at Costa Coffee, said: “This transformation reflects…our ambition to create modern and inviting spaces, where enjoying a coffee becomes a meaningful part of the day.”
Starbucks in the US has begun reintroducing ceramic cups and handwritten names on paper cups, and is adding more power outlets and warmer design, in a bid to bring back a living room feel.
At the time, Starbucks chairman and CEO Brian Niccol, commented: “We’re refocusing on what has always set Starbucks apart - a welcoming coffeehouse where people gather.”
Pret has also shifted. Its new regional formats in Maidenhead and Broughty Ferry reduce grab-and-go to a single shelf and add dine-in menus, more hot food, crockery and children’s play areas.
Clare Clough, Pret’s managing director for UK and Europe at the time, described it as “making Pret a destination for customers in less of a rush.”
The direction is clear. Legacy operators are trying to move away from the commuter only model and towards a broader, more lifestyle led café.
Premium operators drive momentum
Lumina Intelligence data shows weekly penetration of out of home coffee occasions has risen from 13% in 2022 to 15.1% in 2025. Growth is concentrated among premium and distinctive operators, which are outperforming the market.
WatchHouse has grown turnover by 38%, Black Sheep Coffee by 28% and Blank Street by 27% year on year. These operators are setting the pace by focusing on design, product innovation and a stronger sense of brand identity.
Ole & Steen is another example. After pausing new openings to focus on operations, the Danish bakery café has reported a 25% uplift in EBITDA and is now seeing double digit sales growth. In June, MD Graham Hollinshead told MCA that improving coffee quality, refreshing store design and presenting products more effectively has driven momentum.
EL&N is also pushing ahead. With 44 stores across 12 countries, the brand is targeting both compact high traffic formats and large-scale experiential flagships.
Founder Alexandra Miller describes the UK as the “heartbeat” of the brand, and its focus now is on creating experiences that are worth people’s time and money, blending strong design with operational discipline.
Blank Street shows that there is no single formula. Many of its sites have limited seating and are closer to a takeaway model, but its distinctive product offer, particularly around matcha, has driven growth to £35.8m turnover in 2024, and first-time profitability in the UK.
For Blank Street, cultural partnerships, innovative flavours – such as strawberry shortcake and banana –, and brand resonance with younger consumers have offset the lack of large dwell spaces.
For operators, the lesson is that clarity of concept can matter more than square footage.
Even outside the coffee category, the same trends apply. Wasabi’s Cambridge flagship now includes a dining and workspace zone upstairs, while keeping the fast flow model on the ground floor. Flexible design is becoming standard across formats.
Grab and go will still prevail in travel hubs and high footfall areas, but it is no longer the defining model. The mainstream is moving toward cafés that can flex across occasions, justify dwell time and deliver a more premium experience.
The next phase of the market will be won by brands that combine quality, design and technology to make cafés relevant for how people live in today’s cost-conscious environment.
When consumers are spending five pounds on a drink they could make at home, they expect something more – an experience, not just a transaction.
