A popular coffee chain with 2,300 sites across the UK could face being sold under a £2billion deal.
Adored by coffee drinkers across the country, the high street staple is renowned for its trademark beverages and innovative snacks.
Now, US soft drink company Coca-Cola are said to be working alongside investment bank Lazard to review a potential sale of the iconic British coffee chain, Sky News has reported.
Indicative offers are understood to be due in the early autumn months. However, Coca-Cola, who have headquarters based in Atlanta, may chose not to proceed with the sale.
Founded in 1971 by Italian brothers Sergio and Bruno Costa, the chain was first sold to Whitbread in 1995 at a cost of £19million. At the time, it held less than 40 sites.
Then, major fizzy drinks brand Coca-Cola purchased the iconic UK coffee brand at a cost of £3.9billion in January 2019.
Yet, analysts have said that they believe the chain could now sell for around £2billion, amid increased financial pressures created by a tighter consumer market.
In their 2022 accounts, Costa revealed that financial pressures had taken a toll on the business, ranging from ‘the economic environment and inflationary pressures’.
A popular coffee chain with 2,300 sites across the UK could face being sold under a £2billion deal. US soft drink company Coca-Cola are said to be working alongside investment bank Lazard to review a potential sale of Costa Coffee, Sky News has reported (file image)
Indicative offers are understood to be due in the early autumn months. However, Coca-Cola, who have headquarters based in Atlanta, may chose not to proceed with the sale (file image)
Major fizzy drinks brand Coca-Cola purchased the iconic UK coffee brand at a cost of £3.9billion in January 2019. Yet, analysts have said that they believe the chain could now sell for around £2billion, amid increased financial pressures created by a tighter consumer market (file image)
The result, it said at the time, was a ‘restructing programme to address the scale of overheads and invest for growth.’
At the time the acquisition was made, Coca-Cola’s chief executive, James Quincey, described Costa as capable of providing the company with ‘new caoabilities and expertise in coffee’, while also allowing their system to ‘create opportunities to grow the Costa brand worldwide’.
However, Costa’s accounts filed at Companies House in 2023 revealed that the chain recorded revenues of £1.22bn.
Despite being a nine per cent increase on the previous year, the figure stood below the £1.3billion recorded in 2018, the final year before it was sold to Coca-Cola.
As one of the UK’s largest private sector employers, reports have suggested it holds a global workforce of 35,000.
Daily Mail has approached both Costa Coffee and Lazard for comment.
The proposed sale comes amid increased closures for British high street chains, as experts have warned there is ‘worse to come’ this year after more than 13,000 shops closed their doors for good in 2024 – an increase of 28 per cent on the year before.
In another gloomy report, industry experts predicted that 17,350 shops will shut down this year.
In their 2022 accounts, Costa revealed that financial pressures had taken a toll on the business, ranging from ‘the economic environment and inflationary pressures’. Costa’s accounts filed at Companies House in 2023 revealed that the chain recorded revenues of £1.22bn (file image)
The proposed sale comes amid increased closures for British high street chains, as experts have warned there is ‘worse to come’ this year after more than 13,000 shops closed their doors for good in 2024 – an increase of 28 per cent on the year before (file image)
It is the highest figure since the Centre for Retail Research began collecting the data in 2015 and follows the closure of 13,479 stores last year.
Some 34 per cent of UK business owners have considered closure in the last year for this reason, according to new figures from personal finance firm NerdWallet UK.
Meanwhile, falling customer demand (31 per cent) and supply chain issues (30 per cent) are next most often behind businesses being on the brink.
There are 29 per cent of stores experiencing financial difficulties, while 28 per cent struggle with increased rent or property costs.
And staff shortages were the thorn in the side of a quarter of businesses, as per the survey of UK business owners, according to the Centre for Retail Research.
Earlier this month, Costa Coffee was branded ‘shameless’ after one of its branches promised customers free drinks in return for leaving positive reviews.
A sign appeared on the counter of the Potters Bar outlet, in Hertfordshire, advertising that customers can get ‘any medium size drink for free’ if they provide proof of a store rating of nine or 10 in a feedback email.
The sign read: ‘Get your free coffee. If you receive an email saying “how was your visit at Costa?” Please give us the 9-10 rating there.
‘Take the screenshot of that and bring back to us and you will get any medium size drink for free. Thank you in advance.’
As one of the UK’s largest private sector employers, reports have suggested Costa Coffee holds a global workforce of 35,000 (file image)
Earlier this month, Costa Coffee was branded ‘shameless’ after one of its branches promised customers free drinks in return for leaving positive reviews (pictured)
It is unclear whether such reviews were for internal or external use, but Britain’s largest barista chain is now under fire for seemingly violating consumer law.
Customers were quick to vent their frustrations on social media. One branch visitor posted a picture to X and wrote: ‘Dear Costa Coffee, love to hear your thoughts on this. Surely it makes a total mockery of your reviews.’
In response, the company’s official account, which has almost 275,000 followers, replied: ‘Ooh that’s quite cheeky, drop us a DM so we can chase this up Mark?’.
The sign has since been taken down after the chain said it ‘was put up without approval and does not reflect company policy.’
A Costa Coffee spokesperson told the Daily Mail: ‘We are aware of a sign that was displayed in one of our franchise stores, which was put up without approval and does not reflect company policy.
‘As soon as we became aware of the sign, we asked the store to remove it, which they have done.’
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