Costa returns to profit as iced drinks and matcha boost its coffee-shop business

Costa’s main coffee-shop business returned to operating profit in 2025 after two years of losses. The company attributed the recovery to upgraded outlets and stronger demand for iced drinks, matcha and fresher pastries.

Costa Ltd made £20m in operating profit in the year to 31 December 2025, compared with a £13.5m loss in 2024. Revenue increased 5% to almost £1.3bn, following 1% growth the previous year.

Costa expands its UK network

The chain added a net 50 UK outlets last year, its first net increase in several years. It plans to open another 50 this year, including more drive-through and high-street locations.

Costa has 2,700 outlets in the UK and Ireland out of 4,000 worldwide and employs about 20,000 people. It has refurbished more than 1,200 of its 1,700 company-owned UK stores and plans to remodel about 250 each year.

Iced drinks and matcha drive menu changes

Younger consumers are increasingly choosing decaffeinated coffee and other options amid concerns about drinking caffeine in the afternoon. Costa says it is now the UK’s largest café seller of matcha.

Costa chief executive Philippe Schaillee said the chain had recorded its strongest growth in visits in a decade. He said customers wanted not only caffeine but also iced teas and drinks suitable for the afternoon and evening.

Digital self-order kiosks are already installed in 200 UK outlets. Costa is also expanding sales of Podio office coffee machines, launched in May.

Coca-Cola keeps Costa after failed sale

Coca-Cola confirmed in February that it had abandoned plans to sell Costa after bids failed to meet its expectations. It bought the chain from Whitbread for £3.9bn in 2018.

Since then, Costa has faced higher costs, particularly for coffee beans, and strong competition from Greggs, Gail’s, Caffè Nero and smaller operators. Schaillee said coffee production costs and potentially prices remained high and could be affected by the El Niño climate phenomenon.