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Costa Coffee has hailed a year of “strong progress” after owner Coca-Cola scrapped plans to sell it, with the coffee chain saying its refurbishment plan is paying off.
The UK’s second-largest coffee chain grew revenue by five per cent to £1.3bn last year and returned to operating profit.
Coca-Cola had been hoping to offload the coffee company to a private equity buyer, but ditched plans for a sale in January after bidders failed to meet its expectations.
Costa chief executive Philippe Schaillee said the firm’s investment plan has begun to pay off, with branch refurbishments and product innovation paying off in higher sales and improved productivity.
He said: “These results demonstrate the strength of the Costa brand and the dedication of our hard-working teams, who serve great coffee with heart every day, and reinforce our focus on building sustainable long-term growth.”
The firm delivered an operating profit of £20m in 2025, overturning a £13.5m loss in 2024 which it blamed on “soft footfall and growth of value-led competitors”, according to its latest accounts.
But Costa’s statutory profit slipped by seven per cent to £62m.
Cheaper coffee chains have taken greater dominance of the market in recent years, just as up-market firms like Blank Street have emerged on UK high streets.
Greggs takes Costa’s crown
Earlier this month, Greggs overtook Costa to become the country’s biggest branded coffee destination, with 2,737 outlets compared to Costa’s 2,707.
Costa is slowing its expansion plans. The group opened 79 new UK stores in 2025 and hopes to open between 40 and 50 new sites across the next year.
As of December 2025, Costa was the UK coffee chain with the highest proportion of sites within a five-minute drive of another brand (73 per cent).
But the group is embarking on an extensive refurbishment programme, having refreshed 1,063 stores in the UK and Ireland since 2023, including 305 last year. Costa plans to refurbish about 210 further sites in 2026.
“2025 was a year of strong progress for Costa Coffee, with revenue growth, improved profitability and Costa Limited returning to operating profit,” Schaillee added.
Costa said its investment in Matcha and Ube drinks is driving customer growth, adding that its iced drinks were particularly popular during the summer heatwaves.
The firm said: “Costa is deliberate with innovations ensuring that innovations have staying power that Costa can scale really well.
”That’s the advantage of Costa’s scale: when we see something customers genuinely want, we can make it accessible to millions of people.”
The group serves more than 4m cups of coffee every day and has 6m active members of its loyalty scheme, it said.
Coca-Cola bought Costa for £3.9bn from Whitbread, the FTSE 100 owner of Premier Inn, in 2018.
The group had been seeking about £2bn for Costa, with Asda owner TDR Capital, Gail’s owner Bain Capital and private equity firm Apollo reportedly among the potential buyers.
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