Greggs Overtakes Costa as UK's Biggest Coffee Chain
Greggs, the Newcastle-born bakery chain famous for sausage rolls and steak bakes, has quietly overtaken Costa Coffee to become the UK’s largest branded coffee outlet by store count. According to Allegra World Coffee Portal’s Project Café UK 2026 report, Greggs now operates 2,737 locations across Britain — 30 more than Costa’s 2,707.
It’s a remarkable milestone for a business that most people still think of as a bakery. And it raises an interesting question: when does a shop that happens to sell coffee become a coffee shop?
The Price of a Latte
The average price of a regular latte across UK branded coffee shops rose 3.9% in the past year to hit £3.76. At Costa or Starbucks, you’re likely paying north of £4. At Greggs, a flat white costs £2.20.
That gap has widened as inflation and rising operating costs squeezed margins across the sector. And consumers noticed. The bakery chain’s coffee business has grown steadily while traditional café operators face what Allegra’s report describes as an “increasingly challenging trading environment.” Only 37% of coffee shop operators described current conditions as positive, down from 46% the previous year.
Greggs hasn’t succeeded despite being a bakery. It’s succeeded partly because of it. People popping in for a sandwich or a pastry pick up a coffee at the same time — and at those prices, there’s little friction.
Not Your Typical Coffee Shop
What Greggs represents is the blurring of categories that’s reshaping how Brits get their caffeine. The UK branded coffee shop market grew 3.5% in 2025 to reach 12,313 outlets and £6.8 billion in sales. But much of that growth came from non-traditional formats: bakeries, supermarkets, petrol stations, and convenience stores carving out coffee counters.
The Project Café report forecasts the market will hit 14,380 outlets by January 2031. Whether that expansion comes from traditional café brands or from operators like Greggs will depend on whether the sector can escape the value trap. Younger consumers, in particular, are driving demand for premium formats — iced drinks, matcha, specialty-grade beans — but they’re also price-conscious in ways that favour mass-market affordability.
Greggs has read the room. The chain recently launched an iced matcha range, chasing the same Gen Z trends that specialty cafés have been riding for years. It’s hedging both directions: cheap enough for everyday, on-trend enough to stay relevant.
What Costa Still Has
Store count isn’t everything, and Costa knows it. In Allegra’s consumer polling, Costa topped the charts again, with customers citing consistency, accessibility, and drink quality. Costa remains the cultural default in the UK — the place you meet someone for a proper sit-down coffee, not a grab-and-go on the way to the train.
Coca-Cola, which bought Costa for £3.9 billion in 2019, has also shown no interest in selling despite periodic speculation. The brand’s international footprint, particularly in airports and travel hubs, gives it reach that Greggs can’t match.
But domestically, the sausage roll empire now has more doors.
Why This Matters
The Greggs milestone is less about coffee quality and more about market access. When the cheapest option is also the most convenient — and when it’s everywhere — volume follows.
For specialty coffee, the takeaway isn’t necessarily competitive. Greggs customers aren’t abandoning small roasters; they’re people who might not have been buying specialty coffee in the first place. But it does highlight how far value-driven operators have pushed into territory that used to belong to dedicated café chains.
At £2.20 a flat white, Greggs has found the price point where coffee becomes an afterthought — something you add to your order without thinking twice. That kind of frictionless consumption is hard to compete with on volume. What specialty can offer is the opposite: coffee you actually think about.
The UK market has room for both. But it’s worth noting which model is currently winning on sheer scale.