14 December, 2007
Coffee Republic has re-invented itself in the face of a growing market of coffee shops in the UK - with new branding and a new deli concept.
The old brown and white facade has been replaced with a new red and black retro look that has a larger impact on the consumer.
The chain has transformed its menu, introducing a larger range of tea, hot chocolate, milk shakes and fresh food options. And they promise fast service from a friendly, well-trained team.
"We're trying to drive footfall and enhance the customer experience," says James Muirhead, finance director. "The black and red identity was created about a year ago and the idea is the whole estate will be black and red by the end of December.
"The franchisees don't want to spend money and sometimes we have to say it's worth doing. We'll only have five company-owned stores, while currently we have nine, but we're looking to franchise those. We're focusing on the franchise route because a franchise company with money on the line tends to have better sales. The average uplift is 25 per cent in sales and one outlet was 100 per cent when it switched over to franchise ownership.
"It's been a bumpy ride, but we're very clear on where we're going now."
And that is away from focusing predominantly on coffee. The new menu has a new 'Chill-o-Chino' menu, which includes fruit freezers, iced drinks and various shakes, from classic to more unusual varieties, such as Rolo Shake and Jaffa Cake Shake - to appeal to the kids market. There is also a full range of smoothies, yoggies and juices.
In addition, Coffee Republic has introduced a large tea menu. "You have to go to a hotel in this country for a nice cup of tea," says Muirhead. "So we're bringing in tea that comes in a pot and different types of tea."
The final part of the new concept is the deli. "Our point of difference to Costa and Starbucks is that their food is pre-made and sent out. Our deli food is freshly prepared on site, including made-to-order sandwiches."
The company is now looking for further sites both inside and outside the UK. "Our focus is 50 stores for the next year and 500 stores in the UK in the next five years," Muirhead says. "Landlords are really excited as this is something different. They may want to introduce something new and the retro look has a real impact."
Coffee Republic is already doing well. CEO Stephen Bartlett first approached the company with an interest in a franchise. "There was a shareholder revolt that I led and they made me a CEO," he says. "We've been in a year and turned the company on its head. It's a very strong iconic brand. Countries abroad think we're the Starbucks of the UK, so being listed on the stock market helps.
"In 12 years the company has never made a profit, which is why there was a shareholder revolt. We expect to go cash positive just before or just after Christmas."
In fact at one motorway service station where Coffee Republic's identity replaced a Costa, the figures have increased by 30 per cent.
"Going forward, we've identified railway kiosks, shopping centre cafés on turnover-related rents and the high street," adds Bartlett, who, despite all the new menu options, also believes Coffee Republic should know everything there is to know about coffee and would like to see its stores selling other brands in addition to its own, including Starbucks.
"Our coffee has always won awards," he says. "So we won't change our home brand, but we'll bring in fair trade and organic, and we want to be a special coffee trader. We'll have coffee of the day or coffee of the week and customers will be able to buy special imported coffee."
Tim Hance of Leslie Furness, letting agent for Coffee Republic, says the company is looking for mall café locations. He adds: "We're in discussion with Land Securities, Westfield, Hammerson, Grosvenor and Capital Shopping Centres." Coffee Republic is planning to open a further four stores before Christmas.
