Up until the mid-1990s, coffee and sandwich shops were essentially similar entities. However, the arrival of both US- and Italian-style branded coffee shops in the middle of the decade caused a part of the sector to differentiate itself from the traditional coffee and sandwich shops that existed in many towns and cities. These branded coffee shop chains represent virtually the entire growth in the coffee shops market. Starbucks, the US-based international chain, and the Whitbread-owned Costa Coffee are now the largest in the UK, with Caffe Nero and Coffee Republic as two further important branded chains.
The rapid growth in popularity of coffee shops in the economic bull years between 1995 and 2000 — with high-quality and high-priced coffees and patisserie items — resulted in large numbers of shop openings, mainly in Central London. By 2003, the branded coffee chain segment claimed a 28.2% share of total coffee shop outlets nationally, and a 30% share of sales value. Forecast growth is anticipated to increase this to a 39% share of outlets and a 43.6% share of sales value by 2008.
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