Greggs, a British bakery and café chain, has overtaken Costa Coffee to become the largest branded coffee operator in the UK, according to the latest report from the Allegra World Coffee Portal, titled Project Cafe UK 2026. This shift comes after Greggs added 34 new outlets in the first half of 2025, bringing its total number of stores to 2,737. Costa Coffee, which previously held the top spot, now operates 2,707 stores. This marks the first time Greggs has surpassed Costa in the number of outlets, according to Retail Gazette. The UK coffee shop industry as a whole saw significant growth in 2025, with total sales reaching £6.8 billion—a rise of more than 5% compared to the previous year. However, the market remains highly competitive, with over 12,300 branded coffee outlets across the country. This represents a 3.5% increase from the previous year, showing that the sector is expanding but also becoming more crowded. Greggs’ 2025 financial report highlights its strong brand performance, as it ranked No. 1 in the YouGov Brand Index for quick-stop and coffee shop services. The company’s CEO noted that Greggs has grown its market share in key areas like coffee, breakfast items, vegan-friendly products, and iced drinks. Looking ahead, Greggs plans to open more than 100 new stores in 2026 and has set a long-term goal of reaching 3,500 outlets, including smaller "Bitesize" stores that focus on convenience and affordability. In contrast, Costa Coffee has chosen to focus on renovating existing stores and updating its menu rather than expanding its footprint. The company reported losses of over £13 million in 2024. Additionally, a planned sale of the brand by its parent company, Coca-Cola, did not proceed due to lower-than-expected interest from potential buyers. Despite the industry's growth, rising prices have begun to affect consumer behavior, particularly in the higher-end coffee market. The cost of coffee beans, a major imported commodity, is expected to rise further this year due to climate-related factors, including the El Niño weather pattern. A recent study also found that Costa’s coffee contains the highest caffeine content among major UK brands, with Greggs following closely behind. Meanwhile, a coffee industry insider revealed that the profit margin on a typical £4.10 coffee drink is just 18p after accounting for labor, energy, and other expenses.