Costa Coffee saw its losses more than double in a year as it faced tough competition and “challenging conditions”. The high street chain, owned by Coca-Cola, saw its operating loss skyrocket from £5.8 million in 2023 to £13.5 million in the year to December 2024, according to figures filed at Companies House.
The coffee giant warned that the loss was “primarily driven by challenging conditions with soft footfall” as well as the growth of “value-led competitors”. It comes as the high street faces a surge in closures during difficult trading conditions, with many citing changing customer behaviour towards online shopping.
However, Clive Black, head of consumer research at Shore Capital, previously told The Grocer that Costa’s problems came from its positioning.
Cheaper competitors such as McDonald’s and Greggs have swept in to appeal to a key market during the cost of living crisis, while more expensive artisanal options have a better “story” and food.
He said that there was a “whole plethora of independent, often artisanal players offering a better experience, a better ambience, a better story, so less corporate and much better food”.
During its second-quarter earnings call in July, Coca-Cola CEO James Quincey said Costa had “not quite delivered” and was “not where we wanted it to be from an investment hypothesis point of view”.
Sales did rise by 1% in 2024, taking total revenue to more than £1.2 billion, however, Coca-Cola is reportedly exploring the sale of the chain, just five years after acquiring it in a £3.9 billion deal. Analysts have suggested it may now be sold for £2 billion.
A spokesperson for Costa told the Daily Mail: “Costa Coffee delivered like-for-like revenue growth in 2024 and demonstrated strong operational resilience despite inflationary headwinds.
“We continue to invest in our UK estate and the expansion of the Costa Coffee brand globally. These aggregated results are reported as part of The Coca-Cola Company.
“Since being acquired by The Coca-Cola Company in 2019, Costa Coffee has delivered continued revenue growth and is part of Coca-Cola’s strategy to offer a broad range of beverages for every occasion.”
Costa Coffee has more than 2,700 branches across the UK and Ireland after it was founded in London in 1971.
