US chain Starbucks to enter booming Czech café market

Not so long ago, if you wanted to grab a coffee in Prague or any other Czech city you could only really do so at a rather grim old-fashioned café or restaurant but now times have changed. In recent years, both international and local coffee chains have been opening more and more shops. Chains like Coffeeheaven and Tchibo are now offering consumers a wider range of better products and services than before.

Coffee shops in the Czech Republic - Prague in particular - are booming: in recent years international operators on the market like the British Coffeeheaven or the German Tchibo as well as home-grown franchises like Café Emporio, have made increasing use of new possibilities, offering customers better services. Now, there are more outlets from more brand-name companies to choose from than ever, both in the city centre and in the suburbs. I spoke to Karel Mayer, a consultant for the Incoma market research agency.

"The market in the Czech Republic is growing rapidly and still has a lot of potential, and that is good news. It's one of the fastest growing areas within the gastronomy industry. A lot of the success has had to with the building of new shopping centres allowing for newer coffee outlets. That has had an impact. The lifestyle has also changed greatly: Czechs now spend more time 'on the go', more time shopping, and spend more money. If you look at an average income family, it can spend the whole day at the mall, which includes going to the cinema and cafes."

Photo: CTK

According to Karel Mayer, 2004 to 2006 were crucial for the market, with the number of cafes in the Czech Republic more than doubling. Latest trade figures show there are 1700 cafes in the Czech Republic today compared to 800 in 2004. And it won't end there: last week it was announced that the international Starbucks chain would enter the market next year. I asked analyst Karel Mayer about the possible impact:

"There is still plenty of room for new development [and I don't think the entry of the new chain will be negative]. A new player entering the market will influence the chains already here and force them to renew focus on quality, services, and overall atmosphere, all factors that are important for brand-name cafes. One interesting aspect overall is that Czechs have gotten used to drinking coffee from paper cups. Although coffee-to-go probably will probably never catch on like in some countries, Czechs don't mind the cups when combined with overall pleasant service."