This profile provides information about starting up and running a coffee shop. It describes the skills required, the training available, the current market trends and the key trading issues.
Coffee shops serve a wide range of freshly prepared coffees, including espressos, lattes, mochas and cappuccinos, which are prepared by trained baristas using coffee beans ground on the premises. They also serve tea, hot chocolate, iced coffee and other chilled and soft drinks, along with a selection of biscuits, cakes, muffins, savoury snacks and hot and cold sandwiches.
Coffee shops are highly regulated in relation to food safety, registration of premises and workplace health and safety.
The UK coffee shop market, which has become increasingly competitive, is dominated by brands such as Costa Coffee, Starbucks, Caffè Nero and Greggs. The number of coffee shops in the UK was estimated at around 26,000 in 2022.
Qualifications and skills
There are no qualifications legally required to start up and run a coffee shop. However, anyone starting this type of business will require experience in the foodservice, catering or hospitality sector along with an up-to-date understanding of food hygiene issues.
Suitable courses for anyone starting up and running a coffee shop include:
- How to Start a Coffee Shop, which is a two-day course run by Limini Coffee that covers topics such as coffee shop layout, barista equipment, food business registration, and food and drink ranges, and also includes practical barista training. The course costs between £442 and £650 (excluding VAT) depending on the number of students. Alternatively, the theory-only part of the course can be taken as a stand-alone course that costs between £220 and £275 (excluding VAT). Courses are held at Limini Coffee, which is located in Bradford, West Yorkshire. Go to www.liminicoffee.co.uk/how-to-start-a-coffee-shop for details.
- Caffè & Co.’s How to Open a Successful Coffee Shop course, which consists of a day’s theory training (covering topics such as business planning, coffee shop location and set-up, and legal requirements), as well as one and a half days’ practical barista training. The course costs £650. Alternatively, the theory-only part of the course can be taken on a stand-alone basis for £350. Courses are held regularly in Prescot, Merseyside. Go to www.caffeandco.com/opening-a-coffee-shop for details.
- Introduction to Coffee, Barista Skills, Brewing, Green Coffee, Sensory Skills and Roasting, which are modules of the Specialty Coffee Association’s (SCA) Coffee Skills Program. Points are awarded for each module, and baristas who reach 100 points receive the SCA Coffee Skills Diploma ( https://education.sca.coffee/coffee-skills-program). The fee per module ranges from around £150 to £750. For examples of SCA-approved training providers, go to https://darkwoodscoffee.co.uk/training and www.origincoffee.co.uk/collections/barista-courses.
- Barista training delivered by commercial coffee machine manufacturers and suppliers, which is usually included in the price for purchasing or leasing coffee-making equipment. Go to www.caffesociety.co.uk/barista-training and www.tchibo-coffee.co.uk/sector/coffee-shops for examples.
Anyone involved in preparing and serving food must be able to demonstrate appropriate food hygiene knowledge. Suitable courses include:
- The Level 2 Food Hygiene online course from the Nationwide Caterers Association (NCASS), which costs £25 for non-members and around £10.50 for members (prices excluding VAT) and covers topics such as personal hygiene and food storage and handling. Go to www.ncass.org.uk/training/food-hygiene/level-2 for more information.
- HACCP Training, available online from NCASS, which covers the principles and purpose of Hazard Analysis and Critical Control Point (HACCP). The course costs £50 for non-members and £12.50 for members (prices excluding VAT). Go to www.ncass.org.uk/training/health-safety-courses/haccp-training for more information.
- Serving the Allergic and Food Intolerant Customer, which is an online course from Learning Plus that costs £15 (excluding VAT) and covers defining, identifying and distinguishing between allergies, intolerances and allergens, hygiene precautions when preparing food for people with allergies, and what to do if someone has a severe allergic reaction. Go to www.learningplus.co.uk/course/serving-the-allergenic-customer for more information.
Sector awareness and product knowledge
Coffee shop owners can keep up to date with news and developments in their sector and improve their awareness of trends by attending events and reading trade journals and resources, including:
- ‘Boughton’s Coffee House’ ( www.boughtonscoffeehouse.com), which is a trade publication for the UK coffee trade, including coffee shops, that includes industry news and product reviews.
- ’25’ ( https://sca.coffee/read25), a publication which features news and developments in the international coffee industry, interviews with growers, roasters and other coffee professionals, and reviews of new coffees and barista equipment.
- ‘Café Life Magazine’ ( www.thecafelife.co.uk), which is a trade publication that provides market news and trends, reviews of barista and brewing equipment and new coffee and tea products, and details of trade events.
- ‘Imbibe’ ( https://imbibemagazine.com), which is a trade publication for the UK drinks industry, including hot drinks, that features the latest industry news, developments and trends.
- just-drinks.com ( www.just-drinks.com), which is an online resource for the global drinks sector, including hot drinks, that provides news, comment, features and insights.
- BigHospitality ( www.bighospitality.co.uk), which is an online resource for the hospitality and catering industry that provides news about product developments and market trends.
- News and information about the hospitality industry, which is published online by UKHospitality ( www.ukhospitality.org.uk).
- The Caffè Culture Show ( www.caffecultureshow.com), which is a two-day event for the café and coffee shop sector that is usually held at Olympia, London each October. It includes exhibits from suppliers and a seminar programme.
- The London Coffee Festival ( www.londoncoffeefestival.com), which is a four-day event for coffee professionals and enthusiasts that is usually held in March or April every other year at the Truman Brewery in Brick Lane. It provides opportunities to take part in barista workshops, network with suppliers and view new products.
Key market issues and trends
Current market issues affecting both start-up and established coffee shops include the following:
- Independent coffee shops and cafés in the UK were predicted to experience growth of 25% in 2022 to reach £1.6 billion. The number of outlets was also predicted to increase as more people return to the office following the pandemic ( www.bighospitality.co.uk/Article/2022/04/28/Coffee-shop-sandwich-and-bakery-market-set-to-exceed-2019-market-value-in-2022).
- Research by World Coffee Portal has revealed that oat is now the UK’s preferred dairy alternative in UK coffee shops. Despite the sustained rise of dairy alternatives in the UK, dairy milk remains the firm favourite among UK consumers, with 60% opting for semi-skimmed milk, 33% for whole milk and 27% choosing skimmed milk ( www.worldcoffeeportal.com/Latest/InsightAnalysis/2022/February/What-s-in-store-for-UK-coffee-shops-in-2022).
- A survey carried out by World Coffee Portal and UK Coffee Week in October 2021 found that 69% of people believed the sustainability of coffee supply chains was an important factor. Packaging waste, carbon footprint reduction and sending fewer recyclables to landfill were identified as the issues considered most important for coffee shops to tackle ( www.worldcoffeeportal.com/Latest/InsightAnalysis/2022/February/What-s-in-store-for-UK-coffee-shops-in-2022).
- In July 2022, staff shortages and higher operating costs were having a negative impact on the hospitality sector. One in seven hospitality job vacancies were unfilled, with 45% of businesses reducing their trading hours and a third closing for a least a day. Around 93% of hospitality operators reported concerns about higher energy costs and 83% reported concerns about foodservice price rises ( www.ukhospitality.org.uk/news/611116). Some hospitality businesses have turned to advertising jobs on TikTok to boost recruitment ( www.thecaterer.com/news/tiktok-helps-businesses-tackle-staff-shortages, sign-in required).
- The Government has backed new legislation that will ensure all tips go to staff. Under the Employment (Allocation of Tips) Bill, it will be unlawful for employers to hold back service charges from their employees ( www.morningadvertiser.co.uk/Article/2022/07/18/allocation-of-tips-bill-bans-employers-from-withholding-staff-tips).
Trading, commercial and legal issues
Start-up and established coffee shops face the following trading, commercial and legal issues:
Food business registration
All business premises (including coffee shops) where food and drinks are handled, stored or served must be registered with the environmental health department of the local authority in the area where the premises are located.
An application for registration must be submitted at least 28 days before the coffee shop begins trading. Go to www.food.gov.uk/business-guidance/how-to-register-a-food-business for a guide to food business registration.
The Food Standards Agency (FSA) has published a guide to ‘Food Hygiene for Your Business’ at www.food.gov.uk/business-guidance/food-hygiene-for-your-business and has a ‘Safer Food, Better Business’ initiative aimed at small caterers. Go to www.food.gov.uk/business-guidance/safer-food-better-business-for-caterers for more information.
Food hygiene ratings
The Food Hygiene Rating Scheme (FHRS) is run by the FSA in partnership with local authorities. Following an inspection by a food safety officer, coffee shops are given a rating from zero to five, based on their standards of hygiene and food safety.
In Wales and Northern Ireland, coffee shops are required to display their rating on the premises in a prominent place that is clearly visible to customers. Coffee shops in England are not required to display their rating, but it is considered good practice to do so.
Go to www.food.gov.uk/safety-hygiene/food-hygiene-rating-scheme for more information about the FHRS.
A similar voluntary scheme, the Food Hygiene Information Scheme (FHIS), operates in Scotland. Go to www.foodstandards.gov.scot/consumers/food-safety/buying-food-eating-out/food-hygiene-information-scheme for more information.
Other regulations governing food safety and hygiene
Coffee shops must comply with strict rules regarding the safety, presentation, traceability, and withdrawal and recall of food, ingredients and drinks they have sourced from suppliers ( www.food.gov.uk/business-guidance/general-food-law).
To comply with the regulations, coffee shops must keep records of their immediate suppliers. These traceability records should include the name and address of the supplier, the nature and quantity of the order and the date of the supply. The rules are enforced under the Food Safety and Hygiene (England) Regulations 2013, the General Food Regulations 2004 (which apply in Scotland and Wales) and the General Food Regulations (Northern Ireland) 2004.
Under the Food Safety Act 1990 and the Food Safety (Northern Ireland) Order 1991, coffee shops must not process food and drink in a way that makes it harmful to human health. Food and drink served by the coffee shop must also be of the nature, substance or quality that consumers would expect.
Under the Food Information Regulations 2014, allergen information must be provided on menus and in any information provided on the coffee shop’s website about the menu items available. The information should include a statement requesting customers to tell the coffee shop about any food allergies when placing their order.
A list of the 14 allergens that customers need to be informed about is available at www.food.gov.uk/safety-hygiene/food-allergy-and-intolerance.
Under the Organic Products Regulations 2009, ingredients must not be described as ‘organic’ unless they have been sourced from a producer that is registered with an approved organic control body, such as Soil Association Certification ( www.soilassociation.org/certification).
Other premises issues
Coffee shops must be granted permission (usually through a licence) from the local authority before placing tables and chairs or displaying A-boards on the pavement outside their premises.
Under the Equality Act 2010, service providers, including coffee shops, must make reasonable adjustments in order to avoid putting disabled customers at a substantial disadvantage. A coffee shop that fails to make reasonable adjustments must be able to provide a reason for doing so. For example, toilets should be fitted with grab rails, menus should be available in an accessible format for people with impaired vision, and customers in wheelchairs should be seated in ground floor dining areas. However, it may not be considered reasonable for a coffee shop to fit a lift to allow wheelchair users access to first-floor dining areas. In Northern Ireland, the Disability Discrimination Act 1995 (as amended by the Equality Act) applies.
The Equality and Human Rights Commission publishes guidance for catering and hospitality service providers on how to comply with the legislation. To view the guidance, go to www.equalityhumanrights.com/en/advice-and-guidance/equality-law-hotels-restaurants-caf%C3%A9s-and-pubs.
The majority of coffee shops provide toilets and hand-washing facilities for customers by allowing them to use staff toilets. Under the Local Government (Miscellaneous Provisions) Act 1976, coffee shops with up to 25 seats for customers who eat and drink on the premises are required to provide a minimum of one wheelchair-accessible unisex toilet that can be used by both staff and customers. For an example of a local authority’s guidance on the provision of public toilets in food business establishments, go to www.harrogate.gov.uk/downloads/file/45/toilet-provision-in-food-premises.
Fixtures, fittings and equipment
Examples of fixtures, fittings, furniture and equipment used in coffee shops (and prices, including VAT) are as follows:
- Commercial bean-to-cup coffee machine for making cappuccinos, lattes and other ‘speciality’ coffees (from £2,700 to £6,000, or often available on a lease-purchase or hire basis).
- Coffee grinder (from £250 to £2,500).
- Commercial filter coffee machine (from £400 to £900).
- A commercial water boiler (from £270 to £700).
- Bakery display units (from around £50 for a small counter-top acrylic display unit to £1,300 for a wooden counter unit with shelves and display bins).
- Commercial under-counter fridges (from £250 to £1,200).
- A panini grill (from £150 to £200).
- A double sink unit (costing from £350) and a separate hand-wash basin in the work area or very close to it (from around £90).
Suppliers of sales counter equipment, including display units and fridges, include Elite Shopfitters ( www.eliteshopfittersleeds.co.uk/services/cafes-restaurants) and TFSE Products ( https://cafecounters.co.uk).
Barista and brewing equipment and supplies are available from suppliers such as:
- Caffe Society ( www.caffesociety.co.uk).
- Bella Barista ( www.bellabarista.co.uk).
- Beanmachines ( https://beanmachines.co.uk).
- Bidfood ( www.bidfood.co.uk/our-products/our-range/catering-supplies).
The Shop and Display Equipment Association is a membership organisation representing suppliers of shop fittings and equipment. There is a directory of members at www.shopdisplay.org/viewmembers.php.
Suppliers of fire safety equipment include www.fireprotectionshop.co.uk and www.fireprotectiononline.co.uk.
Details of suppliers of commercial kitchen equipment can be found on the Foodservice Equipment Association (FEA) website ( https://fea.org.uk).
Coffee and other supplies
Coffee beans, ground coffee, flavoured coffee, and coffees of various strengths and origins are available from specialist suppliers.
Examples of coffee suppliers include:
- Caffe Society ( www.caffesociety.co.uk).
- Wholesale Coffee Company ( www.wholesalecoffeecompany.co.uk).
- A1 Coffee ( https://a1coffee.net).
- The Espresso Shop ( www.theespressoshop.co.uk).
- Cafeology.com ( https://cafeology.com).
- Pennine Tea and Coffee ( www.pennineteaandcoffee.co.uk).
Coffee shops can source coffee directly from and become partners of coffee growers, importers and roasters. Examples of coffee importers and roasters with partner programmes include:
- Clifton Coffee Roasters ( https://cliftoncoffee.co.uk/wholesale).
- Lincoln & York ( www.lincolnandyork.com/case-studies).
- Peaberry Coffee ( https://peaberrycoffee.co.uk/pages/wholesale-customers).
Many coffee shops use local suppliers to source fresh ingredients and differentiate their menus. Small, local food producers are listed in the SALSA (Safe and Local Supplier Approval) directory ( www.salsafood.co.uk/directory/search2.php).
Big Barn provides an online directory of local food suppliers around the UK. Go to www.bigbarn.co.uk to search the directory.
The sale of food and drink supplied for on-premises consumption, such as in a coffee shop, is standard-rated for VAT.
The rate of VAT on the sale of takeaway food and drink depends on the item sold. For example, milk and milkshakes are zero-rated for VAT, while mineral and spa water, carbonated soft drinks and coffee and tea are standard-rated for VAT.
Go to www.gov.uk/guidance/food-products-and-vat-notice-70114 for more information about VAT rates for food and drink.
Tips and gratuities
Coffee shops must comply with the tax and National Minimum Wage (NMW) rules relating to tips and gratuities. Staff do not have to pay income tax on tips given directly to them by customers, but they are responsible for declaring tips to HM Revenue & Customs (HMRC), which may affect their tax code. However, if the tip is passed on via the employer, tax must be deducted from staff pay under the pay as you earn (PAYE) system.
Tips and service charges cannot be used to make up employees’ NMW pay. For more information, go to www.gov.uk/government/publications/national-minimum-wage-code-of-best-practice-on-service-charges-tips-gratuities-and-cover-charges.
Workplace health and safety
The Health and Safety at Work etc. Act 1974 and the Health and Safety at Work (Northern Ireland) Order 1978 place a general duty of care on employers to protect the health and safety of their employees and anyone else that may be affected by their business activities, such as suppliers and members of the public.
Under the Management of Health and Safety at Work Regulations 1999 and equivalent legislation in Northern Ireland, all employers, and those who are self-employed, must identify and assess any work-related risks. They must also provide employees with adequate health and safety training. The Health and Safety Executive (HSE) publishes a guide to assessing risks, which can be viewed at www.hse.gov.uk/simple-health-safety/risk/index.htm.
Under the Regulatory Reform (Fire Safety) Order 2005 and equivalent legislation in Scotland and Northern Ireland, it is a legal requirement for employers and the self-employed to carry out a fire risk assessment and install appropriate fire detection and prevention equipment on their premises. This includes storage areas where stock is kept.
Under the Health and Safety (First-Aid) Regulations 1981 and equivalent legislation in Northern Ireland, coffee shops are required to provide first-aid equipment for staff.
Under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 (RIDDOR) and equivalent legislation in Northern Ireland, all work-related incidents at the coffee shop that result in a person being taken directly to hospital must be reported. Go to www.hse.gov.uk/riddor/examples-reportable-incidents.htm and select ‘Catering and hospitality accidents’ from the drop-down menu for more information.
Trade body membership
Membership of a trade body can provide a wide range of individual and business benefits. Relevant bodies include:
- The Specialty Coffee Association (SCA, https://sca.coffee), which represents the international coffee industry, including coffee shops. The membership fee for a small coffee shop is €285 per year. Benefits of membership include a subscription to ’25 Magazine’, discounts on training courses and entry to the Specialty Coffee Expo and other industry events, and access to technical and market research.
- The Beverage Standards Association (BSA, www.beveragestandardsassociation.co.uk), which represents the out-of-home beverages industry, including coffee shops. Membership benefits include use of the BSA logo, discounts on training courses, access to a technical helpline and networking opportunities. The annual membership fee for a retailer with one branch is around £82 (excluding VAT).
Promoting the business
Opportunities for promoting a coffee shop include:
- Adding the coffee shop’s details to websites such as Tripadvisor and Go Eat Do to allow customers to rate the coffee, food and service.
- Creating a Facebook business page to encourage customer referrals. Go to www.facebook.com/business for further information about how to use Facebook for business promotion.
- Creating a short video about the coffee shop, uploading it onto online video-sharing platforms such as YouTube and including a link back to the coffee shop’s website. Go to www.youtube.com and enter ‘coffee shop UK’ in the search box for examples of other coffee shops doing this.
- Posting images to social media and photo-sharing websites such as Twitter ( https://twitter.com), Instagram ( www.instagram.com) and Pinterest ( www.pinterest.co.uk) of, for example, coffee art created by the shop’s baristas. Go to https://twitter.com and enter ‘coffee shops UK’ in the search box for examples of other coffee shops doing this.
- Using a Google Business Profile ( www.google.com/business) to edit and update the information about the business that appears in Google search results and Google Maps.
- Using the Apple Business Register to claim their ‘business place’ on Maps, which enables potential customers to find coffee shops near to them using their Apple devices. Go to https://register.apple.com/placesonmaps for more information.
A coffee shop requires several types of insurance cover, including:
- Public liability insurance, which covers a coffee shop against claims for compensation from customers, suppliers and members of the public injured or adversely affected as a result of its activities.
- Product liability insurance, which provides cover if food or drink served by the coffee shop leads to illness or injury.
- Employers’ liability insurance, which is mandatory as soon as the coffee shop employs staff.
- Legal expenses insurance, which covers against claims for pursuing or defending disputes with customers, suppliers or landlords, or for defending employment tribunal cases.
- Premises and contents cover, which will be needed to cover the coffee shop premises, equipment and stock against accidental damage, deterioration and spoilage, fire, flood, theft and any business interruption arising as a result.
- Cover for use of any vehicles for business purposes, which must include a minimum of third-party cover.
Specialist insurance for coffee shops is available from insurers and brokers such as NCASS Insurance Services ( www.ncassinsurance.co.uk/restaurant-catering-insurance/restaurant-and-cafe-insurance) and Blackfriars Group ( www.blackfriarsinsurance.co.uk/coffee-shop-insurance).
This section provides an at-a-glance list of the legislation that coffee shops must comply with. Professional advice about the impact of legislation should always be taken before making any business decisions.
Food safety and hygiene
- EC Regulation 852/2004 covers food hygiene, registration of premises, cleanliness, provision of equipment and facilities, and temperature control. It introduced the concept of Hazard Analysis and Critical Control Point (HACCP), which involves documenting a food safety management system.
- The Food Safety and Hygiene (England) Regulations 2013, the General Food Regulations 2004, which apply in Scotland and Wales, and the General Food Regulations (Northern Ireland) 2004 require that food supplied by coffee shops is safe, that information about ingredients does not mislead customers, that the origin of their supplies can be traced and that any unsafe food is withdrawn or recalled.
- The Food Information Regulations 2014 set out requirements in relation to the provision of allergen and nutrition information on food and drink labels and menus.
- The Food Safety Act 1990 and the Food Safety (Northern Ireland) Order 1991 make it an offence for food to be processed in a way that makes it harmful to human health.
- The Organic Products Regulations 2009 outline details of the registration and inspection system for organic food produced and sold in the UK, define ‘organic’, and implement the EU directive on labelling and storing organic food products.
Workplace health and safety
- The Health and Safety at Work etc. Act 1974 and the Health and Safety at Work (Northern Ireland) Order 1978 place a general duty of care on employers to protect the health and safety of their employees and anyone else that may be affected by their business activities, such as suppliers and members of the public.
- Under the Health and Safety (First-Aid) Regulations 1981 and equivalent legislation in Northern Ireland, coffee shops are required to provide first-aid equipment for staff.
- Under the Management of Health and Safety at Work Regulations 1999 and equivalent legislation in Northern Ireland, all employers, including those who are self-employed, must identify and assess any work-related risks. They must also provide employees with adequate health and safety training.
- Under the Regulatory Reform (Fire Safety) Order 2005 and equivalent legislation in Scotland and Northern Ireland, it is a legal requirement for employers and the self-employed to carry out a fire risk assessment and install appropriate fire detection and prevention equipment on their premises. This includes storage areas where stock is kept.
- Under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013 (RIDDOR) and equivalent legislation in Northern Ireland, all work-related incidents at the coffee shop that result in a person being taken directly to hospital must be reported.
- The Highways Act 1980 gives local authorities in charge of public highways the power to require traders to seek permission from their local authority to place displays, A-boards, tables or seating on land that is owned by the highway authority.
- Under the Equality Act 2010, it is unlawful for any service provider in England, Wales or Scotland, including coffee shops, to refuse to provide a service to a disabled person, offer a lower standard of service or provide a service on worse terms, unless they can objectively justify doing so. In Northern Ireland, the Disability Discrimination Act 1995 (as amended by the Equality Act) applies.
- Under Section 20 of the Local Government (Miscellaneous Provisions) Act 1976, coffee shops with up to 25 seats for customers who eat and drink on the premises are usually required to provide a minimum of one wheelchair-accessible unisex toilet that can be used by both staff and customers.
SEC072 Restaurants and Foodservice – Sector Update
SYN010 Foodservice – Industry Snapshot
BOP016 Caterer/Buffet Service
BOP085 Fast Food Takeaway
BOP086 Mobile Takeaway
BOP087 Tea Room
BOP140 Sandwich Shop
BOP295 Sandwich Delivery Round
BOP552 Mobile Coffee Cart
MBP046 Health Food/Organic Café
MBP061 Ceramic Café
MBP121 Raw Food Café
MBP276 Coffee Roaster
MBP355 Bubble Tea Café
MBP398 Sewing Café
MBP449 Cat Café
Specialty Coffee Association (SCA)
Beverage Standards Association (BSA)
Tel: 07944 161785
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