Success for industry operators is often determined by customer service, and the price and quality of their product
Melbourne, Australia (PRWEB) May 28, 2012
The Cafes and Coffee Shops industry owes its success to the nation's love for quality gourmet coffee, which is entrenched in the daily routine of many Australian consumers. This unique aspect of the Australian market supported demand for the industry during the recent global economic downturn. During this period, revenue for the industry grew compared with rival hospitality industries such as restaurants and catering, which both experienced a consistent decline in revenue. According to IBISWorld industry analyst Steven Connell, “Success for industry operators is often determined by the level of customer service, price, the quality of their coffee brand and how well they make a cup of coffee.” Overall, revenue is expected to grow by an annualised 2.6% over the five years through 2011-12 to total $4.96 billion. Revenue for 2011-12 is expected to grow by 2.3%.
The industry is expected to experience sustained growth over the five years through 2016-17 as Australians remain hooked on coffee. Connell adds, “While the economy will remain soft early in the period, consumer demand for high quality, convenient food and beverage offerings will underpin strong sales of coffee, pastries and meals.” Growth is expected to strengthen later in the period as the economic outlook improves and trends, such as the ongoing increase in health consciousness and the rise of ethical consumer spending, bolster sales. While the presence of international players and coffee shop franchises is expected to increase, the prevalence of small specialty operators and intense competition driven by the nation's entrenched coffee culture are likely to remain the underlying tenets of the industry's success and vibrancy. Industry revenue is expected to increase over the five years through 2016-17.
The Cafes and Coffee Shops industry has a low level of market share concentration compared with other Australian industries. The industry is largely fragmented and traditionally encompasses a large number of single establishment, owner-operated cafes. The most prominent players in the industry according to size and global reach are major US franchised operators: McDonald's McCafe, Starbucks Coffee and Gloria Jean's Coffees. The industry is highly competitive. Owner-operators input a significant proportion of their own time and effort into running a cafe. The industry is known for its large staff turnover, which generally depends on the number of casual staff who work in the industry while studying. The relatively low wages and lack of a well-defined career path deters many employees from seeing the industry as a long-term employment opportunity.
For more information, visit IBISWorld’s Cafes and Coffee Shops report in Australia industry page.
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IBISWorld industry Report Key Topics
This industry consists of cafes serving food and beverages for customers on premises. The report covers the following business types: licensed cafes, BYO cafes, licensed and BYO cafes and unlicensed cafes. This industry excludes takeaway food services, restaurant and catering services, theatre restaurants and the selling of alcohol for consumption on and off premises.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.