The Coca-Cola Company reported a fall in volumes for its Costa Coffee business in 2024 as heightened competition and low consumer confidence remain significant headwinds for UK coffee chains
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Coca-Cola acquired Costa Coffee for $4.9bn in January 2019 | Photo credit: The Coca-Cola Company
US beverage giant The Coca-Cola Company has highlighted a subdued performance from Costa Coffee in the UK as negatively impacting its full-year coffee segment results.
Atlanta-based Coca-Cola reported 3% year-on-year group revenue growth for the 12 months ended 31 December 2024 to reach $47.1bn, with fourth quarter sales up 6% to $11.5bn. However, its coffee segment volumes fell 3% year-on-year and 1% quarter-on-quarter, which it attributed to the performance of its Costa Coffee business in the UK.
Coca-Cola acquired Costa Coffee for $4.9bn in January 2019 and credited the coffee chain as a key driver of 13% and 3% year-on-year coffee segment volume growth in 2022 and 2023 respectively.
However, heightened competition and lower consumer confidence have created headwinds for many UK coffee shop operators. World Coffee Portal’s annual survey of UK industry leaders shows price consciousness is now perceived as the most important consumer trend in the UK branded coffee shop market.
Further highlighting the tough trading landscape, Project Café UK 2025 shows that the number of UK industry leaders reporting 5% sales growth or higher over the last 12 months fell from 54% to 37% year-on-year, while those reporting a sales decline rose from 13% to 24% over the same period.
Costa Coffee closed net six UK store over the last 12 months and saw its total market share fall 1.3% to 23.3% amid recent outlet growth by competitors, including Starbucks, Greggs, Gail’s and Black Sheep Coffee.
The coffee chain saw 2023 profits fall by more than £250m (£326m) to a £9.6m ($12.5m) pre-tax loss, according to a Companies House filing from October 2024.
Nevertheless, Costa Coffee remains the largest branded coffee chain in the UK with over 2,670 stores and 15,000 self-serve coffee machines.
Founded in 1971, the coffee chain continues to enjoy significant brand affinity among UK coffee shop consumers, having been voted ‘The Nation’s Favourite Coffee Shop’ for 15 consecutive years by World Coffee Portal’s independent panel of over 5,000 UK coffee shop consumers.
Outside of the UK, Costa Coffee is also pursuing an ambitious growth strategy. The coffee chain, which currently operates 1,500 outlets and 1,600 self-serve units across 50 international markets, opened its first coffee shops in Belgium and Italy in 2024, while significantly expanding its presence in key growth markets Saudi Arabia and India.