Coffee shops to plug Dixons gap

CAFFE Nero is in talks to buy some of the 106 stores being closed by High Street electrical retailer Dixons.

Gerry Ford, chief executive and founder of the coffee chain, said that his company was in discussions to acquire some of the stores, depending on whether their size and location fitted his chain.

Dixons chief executive John Clare blamed high rents for the move from the High Street. 'We are in the sort of space that is sought by fashion chains, Starbucks and fast food shops that have margins that are three times as much as ours,' he said.

However, Ford said that 'rents have never been better,' now that other rivals for the small retail outlets such as mobile phone firms have either slowed down their expansion or are moving to bigger sites.

And in a country where there are 60,000 pubs and only 2,000 coffee shops, Ford believes there is still a huge amount of potential in a market worth £2.1bn a year.

Research has shown that consumers will not walk more than two blocks for a coffee.

Caffe Nero is looking into selling alcohol at some of its branches.