Coffee chains' turnover set to double

Despite the woes of one company, the British market is expected to reach an all-time high of £1bn

Britain's latte and cappuccino culture marches on. New figures from industry analysts suggest the turnover of the nation's 7,600 coffee shops is set to double by 2005 - reaching an all-time high of £1bn. The inexorable rise has prompted a university to launch the first study into our coffee obsession amid fears the high street pub is being sidelined.

Last week, Coffee Republic announced it was scrapping its comfy sofas and rebranding itself as an American-style deli for the "eat, meet and drink" generation. The company recorded a pre-tax loss of £9.8m and blamed low-spending customers who lounge around without buying enough lattes and cappuccinos. But analysts were quick to dismiss any suggestion it signals a wider downturn in the market.

Coffee Republic's decision to abandon its trademark laid-back vibe comes as other leading chains rack their brains to think of new ways to expand their ever-burgeoning empires. The Wall Street Journal recently reported that Starbucks is even considering introducing alcohol and pizza into some of its outlets.

Mark Hughes, a market analyst with Numis, predicts that, in two years' time, all but a handful of coffee shops will be owned by one of the "big three" chains, Starbucks, Caffè Nero and Costa. By then their combined turnover will, he believes, have topped £1bn. "There is growth in the market but it is being polarised increasingly into three brands," he said. "It looks as if these three will end up succeeding in what will be a £1bn market."

The rise and rise of the coffee shop as Britons' most favoured daytime hangout is even eliciting the interest of academics. Researchers at Glasgow University have just launched a unique study into the behaviour of sofa-dwelling coffee drinkers in an effort to assess whether cafés have truly become the pubs of the 21st century.

The project, dubbed "The Cappuccino Community", aims to interview people who frequent coffee shops on a regular basis to discover whether they are using them as a substitute for traditional social haunts such as bars and clubs. There is a strong incentive to take part. In exchange for allowing themselves to be pestered by the researchers, subjects will be supplied with unlimited coffee and cake.

The study's originator, Dr Eric Laurier, a research fellow in the university's department of geography, says he aims to find out if there are any parallels between the role of the modern café and that of 18th- and 19th-century tea houses.

"This is a project to look at how the expansion of cafés has led to changes in society," he said. "Historically, tea rooms were very much related to the temperance movement where people would gather without going to the pub. We started the first phase of the project in Edinburgh last year, and concentrated on the types of people who were working in coffee shops. Now it's the turn of those who drink in them."

While Dr Laurier's study will focus principally on why people go to coffee shops, and how they consume and socialise once there, it will also take in the various changes to the business models favoured by individual café chains.

One day in the life of a popular coffee shop sofa ...

Eye witness: Annabel Fallon asks customers at Coffee Culture in York to spill the beans on their drinking habits

11.20am: Lesley Jane, 57, learning support assistant

Drink: Small latte

Time and money spent: At least half an hour and £1.40.

"I come with my eight-year-old granddaughter every week without fail. She always gets a lovely weak tea. Today I've been here 20 minutes, although I will spend at least an hour here. When I am with my granddaughter, we try to get here early to get on a sofa - she loves it. When I come here I get time out to completely relax. I'll chat to the owner or the other regulars. There is a lovely community feel to it, unlike the chain shops. We all know each other - all the people who work on the street come here each day at lunchtime."

Noon: Ashley Dé, 23, and Chris Hock, 22, both students

Drinks: A large filter coffee and banana smoothie for Ashley and an espresso for Chris

Time and money spent: 25 minutes and £5.25

"I seriously need to recover my energy levels," says Ashley, who appears to be nursing a hangover. "We can't stand sitting on tall stools, so given the choice I will always have a coffee somewhere I can sit comfortably - providing it's a smoking area, of course!"

1.45pm: Julie Streames, 38, a drugs counsellor, and her friend Jean Lawson, 55, who looks after her mother on a full-time basis

Drinks: Two white coffees

Time and money spent: Half an hour and £3.20

"I have come here today precisely because of the comfy sofas," says Jean. "This place has what I call a good proper sofa where you can sit and have a good natter! I really hate those horrible plastic ones they have in Coffee Republic. I can't imagine anyone would want to stay very long on those things - I could sit for hours on this one."

3.30pm: Andrea La Terra Pirre, 29, and Paolo Fusco, 35. Both are from Italy and work in restaurants in York

Drinks: Espressos

Time and money spent: About 10 minutes and £2.80

"We come here fairly regularly to meet friends," says Paolo. "We both always have espressos - a genuine Italian espresso is hard to come by in this country - but here they have it. We have just had lunch following our shift. The espressos are to finish off. Yes, we like to sit on the sofas - who doesn't?"

4.05pm: Laura Adshead, 19, and Lauren Rubery, 18, both students

Drinks: Frappuccino for Laura, filter coffee for Lauren

Time and money spent: Half an hour and £4.05

"We have just come across it, coming back from lectures," says Laura. "Yesterday we went specifically to Starbucks for the sofas - it's a nice way to catch up on news. This place is nice, although we do love the Starbucks frappuccinos. A coffee is always nice after a serious shopping session as well."

4.40pm: Roy Finch, 25, club promoter

Drink: Latte

Time and money spent: Half an hour and £1.60

"I was in here recently for two hours with my mum. I do come here a bit - it's nice and quiet. I work as a nightclub promoter so it's good to come in here occasionally and chill for a bit during the day. The sofas are also nice to sit on when meeting up with girls - although I usually come here with my mum."