This is the type of commercial development candidates are expected to analyse in training contract and vacation scheme applications. We explain how to approach more stories like this in our Commercial Awareness hub.

Big name cafe chains are struggling to keep their revenues amidst the rise in popularity of smaller rivals like Blank Street Coffee and Black Sheep Coffee. The number of coffee shops in the UK rose by over 2% last year, with most of these new coffee shops falling under the smaller rivals category.

Coca-Cola had recently attempted to sell Costa Coffee, Starbucks last year closed some of its UK stores, and Pret A Manger wrote down £553 million in goodwill (an accounting confession that the company’s brand/reputation is no longer worth as much).

Larger cafe chains are failing to keep up with the trends that engage a younger population with coffee places. An example is how Blank Street introduced matcha to its menu back in 2023, subsequently then promoting this more heavily in 2024. It was not until last week that Costa introduced an equivalent nationwide matcha offering.

What does this mean for the hospitality industry?

• Higher prices at larger coffee chains leads consumers to buying at independent coffee shops that propose similar prices with a more unique experience

• Consumers that still want cheap coffee are increasingly turning to fast-food places like McDonald’s and Greggs

• The coffee shop industry will likely become more fragmented with consumer preferences for certain chains varying per region.

Knowing the story isn’t enough. In applications and interviews, firms expect you to explain why this matters commercially and how it affects clients. The Commercial Awareness Starter Pack shows you exactly how to do this using a simple, repeatable framework.