Greggs has dethroned Costa Coffee as the largest branded coffee operator in the United Kingdom, marking a significant shift in the country’s coffee market.
The bakery chain, long associated with sausage rolls and pasties, has aggressively expanded its lower-priced coffee offering to capitalise on shifting consumer preferences.
Greggs added 34 new shops in the first half of 2026, bringing its total outlet count to 2,737, compared with Costa’s 2,707, according to Allegra World Coffee Portal’s Project Cafe UK 2026 report.
This is the first time the bakery brand has moved ahead of Costa, with consumers increasingly mixing preferences for premium coffee with value-focused alternatives.
The broader UK coffee shop economy grew to £6.8bn in 2025, representing an increase of more than 5 per cent year on year, reflecting continued appetite for coffee culture despite rising costs.
Competition across the sector is intensifying, with over 12,300 branded coffee outlets now operating across the UK, up 3.5 per cent on the prior year.
Greggs ranked number one for value on YouGov’s Brand Index among quick-stop and coffee shop services, according to the company’s 2025 annual financial report.
The company’s CEO noted that Greggs had “grown [market] share of categories such as coffee, breakfast, vegan-friendly options and iced drinks” in the same report released earlier this year.
Greggs plans to open more than 100 shops in total across 2026, with a longer-term ambition of reaching 3,500 outlets, including smaller format ‘Bitesize’ stores.
Costa Coffee, by contrast, is focusing on refurbishment and a range refresh rather than expansion, and announced losses of more than £13m for 2024 at the start of this year.
An intended sale of the Costa brand by parent company Coca-Cola also fell through after bids and interest were reportedly significantly lower than expected.
Escalating coffee prices have pushed some consumers toward value operators, and that pressure could intensify further due to expected price increases on imported coffee beans linked to this year’s climate events, including El Nino.
In a separate development, the boss of coffee group Grind recently provided a cost breakdown showing he makes just 18p profit off a £4.10 drink, once staff, energy, and other costs are factored in.
A further study also found Costa’s brew contained the highest caffeine content among rivals, with Greggs coming in second place.
