Losses at Costa Coffee have more than doubled to £13.5m for 2024 as it struggles to compete with cheaper rivals.
The new financial filings from Companies House show they are up on £5.8m operating losses of the previous year and are in contrast to the chain’s fortunes before the Covid pandemic, when Costa was frequently posting annual profits of up to £100m per year.
Last year, it was widely reported that parent company Coca-Cola was seeking to sell the Costa Coffee brand, little more than seven years after buying it for almost £4bn. A sale this year is not expected to fetch more than £2bn, though recent reports have suggested there are concerns over the price of a deal with preferred bidder, TDR Capital.
Costa has said the most recent results were down to higher competition from other coffee house brands and lower footfall on high streets.
Additionally, the rising cost of coffee beans and other inflationary cost pressures on operating expenses had further reduced the profitability of the business across the year.
One analyst, Clive Black of Shore Capital, said: “It has perhaps reached the peak of its extent in the UK, ‘peak Costa’ if you like, which makes it more exposed than most to competitive challenges.”
Additionally, Black pointed out that 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” was also a big factor for the legacy chain to contend with.
Analysis by the Telegraph suggested the average price of coffee has risen around 80p for consumers since 2022, to above £4 – but in many places it can be £5 or more.
Last autumn, Costa ran a limited-time deal in partnership with Co-op shops, where drinks were available for £1.
A Costa statement said: “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.”
