Trouble brewing: Industry profit margins have taken a hit as competition intensifies

IBISWorld’s 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.


Industry Threats & Opportunities

  • Volatile world coffee prices have increased costs for industry players
  • In an effort to increase market share, operators have increased their efforts to improve quality

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    Industry Analysis & Industry Trends

    Australia's coffee culture has kept revenue brewing in the Coffee Shops industry over the past five years. The proliferation of coffee drinking has caused a dramatic increase in the number of small boutique coffee houses, especially in inner-city locations where office workers congregate. Coffee drinking has become entrenched in the daily routines of many Australian consumers, which supports industry demand even during widespread economic uncertainty. As a result, industry revenue is forecast to rise steadily by a compound annual rate of 4.0% over the five years through 2016-17. This includes a forecast increase of 2.8% in 2016-17, to total $2.5 billion...

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    What is the Coffee Shops industry?

    The Coffee Shops industry exhibits a low level of capital intensity. IBISWorld estimates that for every dollar spent on capital costs, $9.58 is spent on wages. This low capital intensity is supported by a high reliance on labour across all industry functions. Operators require labour for coffee preparations, food handling, cleaning, customer service and administrative functions. Demand for coffee from a particular operator can be largely driven by the skills of the barista, further driving up the cost of labour.

    The industry often does not require significant capital investment beyond a coffee machine. However, over the coming five-year period, coffee machines are expected to become increasingly sophisticated and expensive as coffee makers aim to increase output. Thi...

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    Additional Insights for the Coffee Shops Industry

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

  • Having a clear position in the market
  • Business expertise of operators
  • Access to multiskilled and flexible workforce
  • IBISWorld analysts also discuss how external factors such as Real household discretionary income and World price of coffee in the Coffee Shops industry impact industry performance..

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    Products & Brands

    Major products in this industry
    Hot coffee
    Other hot beverages
    Cold beverages
    Examples of brands in this Industry
    bb's Cafe
    Esquires Coffee
    Gloria Jean's Coffees

    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
  • Real household discretionary income
  • World price of coffee
  • Population aged 18 and older
  • Demand from cafes, restaurants and takeaway food services

  • Current Performance
  • Key trends
  • Profitability
  • Industry participation
  • Chart: Revenue Growth

  • Industry Outlook
  • Table: Coffee Shops Industry Revenue Outlook

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

  • Products & Markets
    Supply Chains
    Key Buying Industries
  • Consumers

  • Key Selling Industries
  • Bakery Product Manufacturing
  • Dairy Produce Wholesaling
  • Fruit Juice Drink Manufacturing
  • Soft Drink and Pre-Packaged Food Wholesaling
  • Tea, Coffee and Other Food Manufacturing

  • Products & Services
  • Hot coffee
  • Food
  • Cold beverages
  • Other hot beverages
  • Chart: Coffee Shops Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Third income quintile
  • Fourth income quintile
  • Highest income quintile
  • Second income quintile
  • Lowest income quintile
  • Chart: Major Market Segmentation for the 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
  • Other costs
  • Chart: Cost Structure Benchmarking – Sector vs Coffee Shops

  • Basis of Competition
  • Internal
  • External

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Coffee Shops Industry

  • Industry Globalization
    Major Companies
    Retail Food Group Limited
  • Table: Retail Food Group Limited - financial performance

  • Operating Conditions
    Capital Intensity
  • Chart: Level of Capital Intensity for the 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 Coffee Shops Industry
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)

  • 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, often large in operation with seating and a range of snacks and beverages both hot and cold
  • Fair Trade
  • Coffee sourced from growers that guarantee minimum working standards for employees.
  • Frappuccino
  • A cold beverage consisting of coffee and blended ice with a variety of flavours
  • 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 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 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 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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