Community spirit: the rise of the coffee house

Just when it seemed the buzzing coffee market had run out of steam with the likes of Coffee Republic and BB’s in need of rescue from administration last year and even Starbucks, architect of the previous decade’s explosion of high-street coffee culture, in apparent decline, the sector has found its footing, adjusted its sights and pushed on with new products such as the successful Flat-White. While nearly 50 pubs a week are closing and the government has felt compelled to appoint a pubs minister and launch a support package for the licensed trade, in 2010 Coffee Republic is still with us under new ownership, while BB’s trades on in a reduced size and has even spawned ambitious new spin-offs such as Love Coffee. The alcohol industry feels under siege from the health lobby and a broke tax-heavy government, but coffee shops have emerged from one of the worst economic crashes in memory stronger than ever and with renewed confidence. Costa continues its meteoric rise, prompting speculation from the City of a demerger from parent Whitbread, which also owns the equally fast-growing Premier Inn chain, and Starbucks, having got its house in order after the return of Howard Schultz as chief executive in 2008, has returned to growth and delivered a maiden dividend thanks to it its current cash rich position to warm the cockles of investors earlier this month. On the other hand, the share-price of pub giant Punch Taverns has crashed in recent years and the likes of Regent Inns, Admiral Taverns and Bay have all sort rescues of one sort or another. Although JD Wetherspoon, the ever progressive pub operator, has boldly announced a strategy to attack the morning coffee market with an earlier 8am opening time, it is a pioneer in that respect and it is Starbucks and its rivals, both chains and independents alike, that appear to have hit on the very thing that has is now evading the struggling, endangered institution that is the UK pub in this country in this age: relevance. The shift from having a regular pub to a regular coffee shop, in a hard working world where we don’t drink and drive, is very much on. While you can still find the odd publican or two spending all his creative energies on opposing the smoking ban, rather than pouring them into improving their businesses in what is an extremely tough trading environment for all, the coffee shops have got their houses in order and seized on the opportunity this affords to position themselves, at the expense of the traditional wet-led boozer, at the heart of consumer society. An independent report from Allegra Strategies, albeit sponsored by coffee chain Starbucks, claims up to a quarter of footfall seen on UK high streets during the recession can be attributed to people out to enjoy a coffee, and that far from contributing to homogenised high streets, the modern coffee shop has helped maintain the vibrancy of the UK’s shopping areas. That sort of patronage is something the average non circuit pub can surely only dream of these days. The report, which contains the views of almost 5,000 consumers as well as coffee shop operators themselves, found 90% of local businesses questioned said the extra trade brings life to their high street and 40% said it gives them a direct lift in takings (with an overall lift to the local economy of 3-5%). Other findings include: Economic Impact . 35% of the British adult population (20 million people) visit coffee shops in a typical week • Coffee shops contribute up to 25% of footfall to high streets • 89% of local businesses agree that coffee shops improve the vibrancy of the area . 68% of consumers would chose to visit another local high street if the one they were on did not have a coffee shop Social Impact . 71% of consumers interviewed say coffee shops create a feeling of community in their local high street . 77% of local businesses stated that coffee shops have a valuable role in the community . Coffee shops are becoming destinations for consumers, with 52% planning their visits rather than just dropping in. . 6% of people using coffee shops are holding business meetings. Jeffrey Young, managing director, Allegra Strategies, said: “High streets have taken a battering during the recession and they are having to adapt and innovate in order to survive and prosper. “With more retail going on-line, successful local shopping is about creating a more diverse mix for people to meet and enjoy their leisure time. There’s no substitute for human contact – which goes some way to explain the phenomenal success of coffee shops.” So it’s a tick in the box for the modern coffee shop chain and independent, more plentiful now with some 11,000 sites than in the coffee shops previous heyday in the 17th century, and perhaps a wakeup call for the British pub, which afterall would have been the name put in front of the above findings twenty or thirty years ago. Coffee shops have faced the same challenges as retail outlets and pubs during the recession and some have failed (although not as badly as Woolworths or Threshers) but many more have prospered. Although it’s true that with more than 50,000 pubs in the country there’s some way to go before coffee shops by number come close, and an argument can surely be made that they never will, if the pub is truly no longer the hub of community life, especially in many urban areas, as this latest Allegra study seems to suggest, it does not arguer well for efforts to arrest the sector’s undoubted decline. Certainly even in a World Cup year, which should provide a great platform for publicans to attract sports fans to pubs, complacency could prove fatal longer-term. The likes of Mitchells & Butlers are pushing ever further into the food market for this very reason, while the “traditional” pub and its pubco landlord simply look increasingly outdated. Successful pubs will continue to exist but only if they retain their relevancy to our daily, changing lifestyles. A pub lunch retains its allure when done well but that pricey lump of cake and tall coffee seems to feature for most of us more than we ever thought possible and in this new age of austerity something surely has to give. For those pubs that can’t find their way back into our hearts it seems the Flat White may yet steamroller them, leaving nothing but butter croissant crumbs in its wake.