If you thought there were already more than enough Costa Coffee shops dotted all over the UK, you’d be mistaken. That’s because, according to Costa itself, its network plan "shows opportunity for at least 3,000 stores in the UK compared to just over 2,200 today". In addition, it has plans to put in more Costa Express machines and to upgrade machines with new management systems, "which will enhance scalability" and allow the company to monitor and control the machines and their content remotely. There will also be upgrades to customer screens "to bring the best quality experience" and to help retailers by enabling options such as site-specific advertising.
One forecourt site that’s doing particularly well with Costa Express is Hickson’s Forecourt’s Birchwood Services in Lincoln.
Manager James Townsend’s only niggle with Costa is the fact that its loyalty card isn’t linked to Costa Express. So the site decided to launch its own. The loyalty card where you buy 10 regular cups of coffee and get your 11th free came about for two reasons: "We were one of the first sites to get a Costa Express machine but suddenly they were everywhere so we had to think about how to keep customers coming to us to get their drinks. Also, a lot of customers said to us ’Costa do a loyalty scheme, can you do it here?’. We did approach Costa but didn’t get anywhere so did our own."
James says they have a young ’computer wiz’ who designed a credit-card style loyalty card with details of the store on one side and the stamping bit on the reverse. "Costa reps are aware that we have the loyalty card and are fine with it because it’s helping sales," he says. "Sales have gone through the roof with some people coming out of their way for a cup of quality coffee and a stamp on their card. We’ve a Co-op half a mile away and they have Costa but still people come to us because of the loyalty card."
The loyalty deal is on regular coffee but if a customer wants a large one as their free one, staff deduct the cost of a regular drink and the customer just pays the difference. A standard drink costs £2.30 and a large one £2.60 so that difference is 30p.
The company has three sites: one forecourt and two c-stores. One of the c-stores has Costa too so the loyalty card covers both sites, customers can get their cards stamped at either and likewise redeem their free coffee at either store.
Of course running a loyalty scheme costs, but James says it’s worth it. That’s because with Costa’s trading model, the more you sell, the better the margin.
"We have one woman who comes in for coffee six times a day so she gets a lot of free cups but the loyalty card keeps her coming back."
Of course, Costa isn’t for everyone and some retailers are purposely steering well clear because they want something a little different.
At Costcutter Shell Crawley Down, they’ve gone from having one coffee machine to having two new Seattle’s Best machines, which offer a range of coffees including espresso, latte, cappuccino as well as Tazo teas and hot chocolate. Site owner Dave Wyatt says: "We now provide a better range of hot beverages and the second machine has reduced queueing at peak times."
He says he finds the Seattle’s Best machines very reliable and efficient, while shoppers find them really easy to use with their touch-screen functionality.
"As everything is computer controlled, the staff and I make sure everything is topped up so it works efficiently.
"All staff know how to clean the machine and this happens regularly throughout the day to clean up any spills, splashes and leftover sugar wrappers that often get discarded. We want to make sure all shoppers that come into the store have a great experience even if they are just popping in for a hot drink."
Since having the two new machines, Dave offers two drinks’ sizes: a large (16oz) and a medium (12oz) so shoppers have a better choice. "This has been really well received with the medium size being really popular with shoppers. We also have a bigger range available which includes syrups and decaffeinated options, which are selling well.
"As we own the machines, we can adjust the pricing accordingly so are able to be really competitive. We sell a large hot drink at £2.19 and a medium at £1.99. We’ve already seen a 15% uplift in hot drink sales in the first month since the new machines were installed so it’s already proving to be a great investment. We’ve promoted the new machines with sandwich boards on the forecourt, exterior signage and in-store pos.
At Nestlé Professional, its new generation coffee machines include the Nescafé Milano and Alegria, which both use technology to ensure operational simplicity for the user, without compromising on the quality of drinks. The Alegria is described as "quick and simple" to operate and provides "consistently delicious beverages in a convenient way from a brand customers know and trust".
It’s available in a range of sizes to meet individual customer needs, serving from 15 cups a day up to several hundred cups.
Meanwhile, the Milano uses Milano Espresso Roast finely ground coffee and as such delivers barista-style drinks without the hassle. The machines are touchscreen and video enabled and drink customisation allows up to 400 options.
Soup can be a sales winner in the autumn/winter months but it can be tricky to offer in-store. Anyone who’d like to serve soup should look out for the UK’s first ’plug and play’ high-tech soup dispenser that works at the touch of a button. The machine has been developed and manufactured by The Vendinova Group using New Covent Garden Soup Co products.
It is a counter-top unit as standard, but a branded base unit is also available to make it freestanding. It works exclusively with specific soup pouches, supplied by New Covent Garden. A barcode is scanned with full details of flavour, nutrition information and to ensure it’s within the use-by date. This soup is then heated and dispensed at the touch of a button.
Unveiled at the recent National Convenience Show in Birmingham, the machine is still on trial in the UK. Approximate cost for the system is £4,000, but there are various pricing levels. All orders would be subject to a site survey.
Retailers will be able to set their own margin and control their profits, but New Covent Garden suggests selling the soup at £2.19 for a 300ml portion.
The machine can hold up to 12 litres of soup for up to 12 hours ie 40 x 300ml portions.
James Townsend, manager of Hickson’s Forecourt’s Birchwood Services in Lincoln.
has just had his second Costa machine installed.
"It’s great as it helps keep the queues down," he says.
"We get a lot of workmen in between 7am and 8am and they’re often in a hurry so if they see long queues there’s the chance they’ll walk away. Now that’s less of a problem. Also you have to clean the machines so they are out of action for around 20 minutes. Now, with two machines, that’s not a problem either."
Costa ups capacity with new Roastery
Earlier this year Costa opened its new £38m roaster, a facility which has more than quadrupled its roasting capacity from 11,000 tonnes of coffee per annum to 45,000, providing the platform for its national and global growth plans.
The new facility covers 85,690sq ft and will enable Costa to produce coffee for 2.1 billion cups of coffee per year. It is expected to operate for the next 20-30 years.
The roastery also includes a new coffee academy, where 3,000 baristi per year will be trained.
Time for better tea
Out-of-home sales of tea are underperforming against the wider coffee shop market value, according to Tea Out-Of-Home 2017, the latest report in the Project Café UK Series by Allegra World Coffee Portal.
The UK coffee shop sector increased by 12% in turnover to reach £8.9bn in 2016, with the low-performing tea out-of-home category contributing just £308m to the total sales.
The report states that although sales of tea in coffee shops continue to rise, the growth is predominantly driven by an increase in price and by the growth of the coffee shop sector as a whole, rather than increased consumer participation.
The tea category currently accounts for 3.8% of the total coffee shop market turnover, declining in sales share from 4.1% in 2015.
While tea is an integral part of British culture and over 15 million cups are consumed every day in the UK, the majority are consumed at home or at work. And a recent consumer study conducted by Allegra, shows that Brits simply prefer tea the way they make it at home.