Convenience stores have been urged to “wake up and smell the coffee” as Whitbread-owned Costa continues to drive up sales.
Costa grew total UK retail sales by 10.1% and like-for-likes sales in company-owned stores by 2.3% in the six months to 1 September 2016. It opened 87 net new outlets in the UK to take it to 2,121.
Alison Brittain, chief executive, said Costa was focusing on offering customers a greater choice and had taken elements of its fresher food concept into a further 13 stores in the London region.
Costa Enterprises had installed 754 net new Costa Express machines to give a total of 5,970 at the half year end, including 647 in nine international markets, she said.
Manchester Spar retailer Paul Stone, which offers the Cheeky Coffee brand in five out of his seven stores and one stand-alone café, and Costa at its St Mary’s Gate outlet, said coffee was crucial for him.
He said convenience stores were missing an opportunity, pointing to figures in the Association of Convenience Stores’ Local Shop Report that showed only 22% of stores had a coffee offer.
This broke down into 17% which had a customer-operated machine, such as Costa Express and 5% with a staff operated barista style offering. Penetration for petrol forecourts is far higher – 70% of which had a coffee machine.
Paul, who has seating in his three newest stores, said retailers should “wake up and smell the coffee” because something was needed to replace the decline of traditional shopping missions such as newspapers and magazines.
“If you’ve not got someone coming into the store every day to buy a newspaper then having a strong coffee offer is a great way of getting somebody into the store four or five times a week. We’ve used coffee to drive more footfall into the shop.”
Raj Aggarwal, who has a Spar in Wigston, Leicestershire, and in Hackenthorpe, Sheffield, said store operators could learn from Costa but didn’t necessarily need sit-down areas. It was the best way to go but depended on space, he said.
“Coffee for me is important but it depends on your demographics. We have it in our Hackenthorpe store but not in Wigston.”