Interview: Second Cup franchise director Jon Cullen

With Costa Coffee reporting a third-quarter sales rise of 17%, Caffe Nero partnering with House of Fraser and Starbucks rolling out innovative systems in its stores that are influencing wider parts of the retail industry, it appears all roads lead to coffee in the UK right now.

Consumers browsing around furniture stores are regularly offered a cup of coffee by sales staff looking to increase shopper dwell time, while some big ticket item retailers have introduced self-service hot drinks machines to keep customers refreshed on their purchase journey.

It is against this backdrop that Canadian coffee chain Second Cup has entered the UK market. With around 400 stores in Canada and 200 stores in other countries around the world, the first Second Cup establishment opened in Manchester city centre in November.

Jon Cullen, a retail consultant who is acting as franchise director for Second Cup, is confident there is space for the brand in a market that continues to grow in the UK each year. Research from Allegra Strategies said that sales of coffee in the UK grew 6.4% in 2013, with more than 16,500 coffee shops in operation.

According to Cullen, the Canadian company brings "a proper American/Canadian style" to Britain's high street, with an offering spanning light, medium and dark roasts, as well as various teas, food and the likes of lattes and cappuccinos.

"If you were to compare us to a UK store, we have the food offering of a Pret a Manger and we probably have a coffee offering better than Caffe Nero – we sit in the middle," he explained.

Second Cup is currently in around 127 countries, including Libya, Iran, Cambodia, and the brand has a history spanning back around a quarter of a century, as it looks to tap into what is a relatively emerging market for coffee. In the UK it has already sold six area developments, which consist of five stores per area developer, including one through a Saudi Arabian company that has bought ten stores in central London.

"It's growing tremendously – there's a lot of interest in an alternative coffee brand," explained Cullen.

"The brand is mature in that the systems and processes are all in place, so it's a great opportunity if people are interested in coffee to get into a new brand. If you want to be a Costa or a Starbucks and you want to be in the heart of a big UK city, you can't because those slots are all full."

Cullen says there is "massive potential" in the UK and the rest of the world for new coffee franchises, and argues that there are "big rewards" on offer for companies looking to expand their organisation overseas.

Having worked in franchising for around 25 years his first piece of advice for companies looking to expand their horizons is to feel comfortable about the market they choose and then focus on that area. He also suggests looking at the possibilities of area developments and ensuring in-depth research is completed around support infrastructure, importing costs and learning about local nuances.

"The attractive market is still the Middle East, because you tend to find individuals with a lot of money who understand they must buy in the infrastructure to support a brand from overseas," Cullen added.

"They also listen and take on board the offering, generally do a good job and can afford to do it properly. The Middle East market is still crying out for great brands."

The US and India also apparently "bring great opportunity" for foreign retailers, but for Cullen and Second Cup the new focus is on the UK. More stores are set to open in the spring of 2015, as Britain's love affair with coffee looks set to continue.

Jon Cullen is a confirmed speaker at the International Retail Franchising Summit, which will run on 11 March 2015 at London's Olympia. For more information or to register for the event please visit the official website.

Click below for more information:

Second Cup

International Retail Franchising Summit

What’s Hot on Essential Retail?