How Greggs took the lead
Greggs has become Britain’s largest branded coffee operator, passing Costa Coffee after continuing its store expansion.
The bakery group now has 2,737 UK outlets, compared with Costa’s 2,707, according to the Project Cafe UK 2026 report from Allegra World Coffee Portal. That puts Greggs 30 locations ahead.
The bakery business opened 34 additional shops during the first six months of 2026, allowing it to claim the top position for the first time. This is not a runaway lead, but Greggs is moving faster.
Costa, by contrast, is focusing on renovating existing premises and refreshing its product range rather than pursuing major expansion. Its smaller store network is therefore unlikely to grow quickly in the near term.
Value is reshaping the coffee market
The UK coffee sector remains lucrative. Its wider economy reached £6.8bn in 2025, rising by more than 5 per cent on the previous year. There were also more than 12,300 branded coffee outlets, an increase of 3.5 per cent year on year.
That growth is happening alongside intensifying competition. Consumers are not abandoning coffee, but many are becoming more selective about where they spend. A premium brew may still be part of the weekly routine, but it now sits alongside lower-cost meals and snacks.
Greggs has benefited from that shift. The chain is strongly associated with sausage rolls and pasties, yet its coffee, breakfast and iced-drink offers have become increasingly important.
Its 2025 annual financial report, published earlier in 2026, said management had “grown [market] share of categories such as coffee, breakfast, vegan-friendly options and iced drinks.” Greggs also ranked first for value in the quick-stop and coffee shop services category in YouGov’s Brand Index.
Costa faces a tougher backdrop
Costa’s position has been weakened by financial pressure and a failed attempt to sell the business. The coffee company recorded losses exceeding £13m in 2024, while parent company Coca-Cola’s planned disposal collapsed after bids and other indications of interest were reportedly well below expectations.
The company is now prioritising refurbishments and changes to its range. That strategy could improve the customer experience and protect margins, but it does little to increase the number of Costa outlets.
Incoming commodity prices add another challenge. Coffee beans are expected to become more expensive this year as climate-related disruptions, including El Niño, affect supply. Higher input costs could put pressure on chains already competing aggressively on price.
Consumers may also be noticing differences in the products themselves. A separate study found that Costa’s drink contained the most caffeine among the rival offerings tested, with Greggs second.
More stores could mean sharper price rivalry
Greggs has signalled that its expansion is far from over. More than 100 openings are planned across 2026, while its longer-term ambition is to reach 3,500 outlets, including smaller Bitesize locations.
That pipeline would give the bakery chain greater reach across residential areas, transport hubs and retail locations. More competitors vying for the same morning and lunchtime purchases could keep prices under scrutiny.
The economics of a cup of coffee are also being closely examined. The head of Grind recently calculated that a £4.10 drink leaves just 18p in profit after staff, energy and other expenses are included.
That figure highlights the tension facing customers and businesses. A drink that appears inexpensive to buy can still be costly for a retailer once wages, utilities and premises expenses are accounted for.
Why it Matters
Greggs passing Costa is more than a minor change in the rankings: it shows how value, convenience and lower operating costs are reshaping Britain’s coffee habits. As ingredient prices rise and consumers remain cautious, chains that combine affordable drinks with everyday food are likely to gain ground, while premium-focused operators may need to work harder to justify their prices.
