Costa Coffee Returns to Profit After Coca-Cola Scraps Sale Plans

Costa Coffee grew revenue by five percent to £1.3bn and returned to an operating profit of £20m in 2025, according to company accounts, following Coca-Cola’s decision to scrap plans to sell the chain. The UK’s second-largest coffee chain cited branch refurbishments and popular product innovations for the turnaround.

Coca-Cola Scraps Sale After Bidders Fail to Meet Expectations

Coca-Cola purchased Costa Coffee for £3.9bn from Whitbread in 2018. The beverage giant subsequently sought about £2bn to offload the coffee company to a private equity buyer. Prospective bidders included TDR Capital, Bain Capital, and Apollo. However, Coca-Cola ditched plans for a sale in January after those bidders failed to meet expectations.

Store Refurbishments and Product Innovations Drive Revenue Growth

Costa chief executive Philippe Schaillee stated that the firm’s investment plan has begun to pay off through branch refurbishments and product innovation. The company delivered an operating profit of £20m in 2025, overturning a £13.5m loss in 2024. That previous loss was blamed on soft footfall and the growth of value-led competitors. Meanwhile, statutory profit slipped by seven percent to £62m. Costa noted that investments in Matcha and Ube drinks drove customer growth, while iced drinks performed strongly during summer heatwaves. The chain serves more than 4m cups of coffee every day and maintains 6m active members in its loyalty scheme.

Greggs Overtakes Costa as the UK’s Biggest Branded Coffee Destination

Cheaper coffee chains and up-market firms like Blank Street have gained market share across UK high streets in recent years. Greggs overtook Costa earlier in the month to become the country’s biggest branded coffee destination. Greggs operates 2,737 outlets compared to Costa’s 2,707 sites. As of December 2025, Costa held the highest proportion of sites within a five-minute drive of another brand at 73 per cent.

Slowing Expansion While Continuing UK Store Refurbishments

Costa is slowing its store expansion plans after opening 79 new UK sites in 2025. The group intends to open between 40 and 50 new sites over the following year. Concurrently, the company is pressing ahead with an extensive refurbishment programme. Costa has refreshed 1,063 stores in the UK and Ireland since 2023, which includes 305 sites refreshed last year and approximately 210 further sites slated for refurbishment in 2026.