Overview

Caffeine hit: Strong competition and rising coffee prices have contributed to declining profit

IBISWorld’s Cafes and Coffee Shops market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

REPORT SNAPSHOT

Market Share of Companies
There are no companies with a dominant market share in this industry
Industry Statistics & Market Size
Revenue
$8bn
Annual Growth
2013 - 2018
4.8%
Annual Growth
2018 - 2023
Profit
Employment
73,329
Business
14,071

Industry Threats & Opportunities

  • The growing number of speciality cafes and coffee shops has contributed to high competition
  • A trend towards premium food has been reflected in the changing products offered
  • High demand for coffee and the affordable nature of most industry products will support growth

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    Industry Analysis & Industry Trends

    The Cafes and Coffee Shops industry has grown strongly over the past five years, supported by Australia's love of quality coffee and vibrant coffee culture. Industry revenue is expected to grow at an annualised 4.8% over the five years through 2017-18, boosted by a large spike in 2013-14 as positive consumer sentiment and growing incomes encouraged consumers to purchase industry products. Industry revenue is expected to increase by 0.8% in 2017-18, to total $8.2 billion. Despite the industry's strong performance over the past five years, competitive pressures have pushed profitability down over the period...

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    Industry Report - Industry Investment Chapter

    The Cafes and Coffee Shops industry exhibits a low level of capital intensity. It is estimated that for every dollar spent on capital costs, $14.88 is spent on wages. Cafe and coffee shop operators require significant labour input in all areas, ranging from coffee and food service to cooking and cleaning. Most positions are unskilled, with some training required for roles such as coffee making. Many cafes and coffee shops lease both their premises and much of their equipment to lower the initial capital outlay and reduce risk. This significantly lowers capital intensity and decreases start-up costs for new entrants. Kitchen requirements for cafes and coffee shops are typically lower than that of restaurants.

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    Additional Insights for the Cafes and Coffee Shops Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Cafes and Coffee Shops Industry are

  • Business expertise of operators
  • Effective cost controls
  • Effective quality control
  • IBISWorld analysts also discuss how external factors such as Demand from restaurants and Expenditure on recreation and culture in the Cafes and Coffee Shops industry impact industry performance..

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    Industry Products

    What is the Cafes and Coffee Shops Industry?

    The industry includes cafes and coffee shops serving food and beverages to customers on premises. The industry excludes takeaway food services, restaurant and catering services, theatre restaurants and establishments that primarily sell alcohol for consumption on and off premises.

    Industry Products
    Coffee
    Other beverages
    Food
    Industry Activities
    Cafe operation
    Coffee shop operation

    Table of Contents

    About this Industry
    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry at a Glance
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Industry Performance
    Executive Summary
    Key External Drivers
  • Demand from restaurants
  • Expenditure on recreation and culture
  • Real household discretionary income
  • Consumer sentiment index

  • Current Performance
  • Positive trends
  • Profitability
  • Coffee culture
  • Chart: Revenue Growth

  • Industry Outlook
  • Convenience
  • Competition
  • Opportunities
  • Coffee chains
  • Table: Cafes and Coffee Shops Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Cafes and Coffee Shops Industry Lifecycle vs The Economy

  • Products & Markets
    Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Dairy Produce Wholesaling
  • Fruit and Vegetable Wholesaling
  • Liquor Wholesaling
  • Meat, Poultry and Smallgoods Wholesaling
  • Tea, Coffee and Other Food Manufacturing

  • Products & Services
  • Coffee
  • Food
  • Other beverages
  • Chart: Cafes and Coffee Shops Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • People aged 15 to 34
  • People aged 35 to 54
  • People aged 55 and over
  • Chart: Major Market Segmentation for the Cafes and Coffee Shops Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Competitive Landscape
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Purchases
  • Wages
  • Rent
  • Depreciation
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Cafes and Coffee Shops

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Cafes and Coffee Shops Industry

  • Industry Globalization
    Major Companies
    There are no major players in this industry
    Operating Conditions
    Capital Intensity
  • Chart: Level of Capital Intensity for the Cafes and Coffee Shops Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Key Statistics
    Table: Industry Data for the Cafes and Coffee Shops Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Jargon & Glossary
    Coffee Chains
  • National or multinational networks of coffee shops that often feature seating and a range of snacks and hot and cold beverages.
  • Fair Trade
  • Coffee sourced from developing nations at fair prices, ensuring better wages and conditions for workers.
  • Food Service
  • Provision of meals for customers, usually accompanied by alcoholic or non-alcoholic beverages.
  • Why buy this report?

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Cafes and Coffee Shops:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Cafes and Coffee Shops market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Cafes and Coffee Shops, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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