Coca-Cola may sell Costa Coffee chain

Turnaround after six years

Coca-Cola bought Costa from the owner of the Whitbread hotel chain for £3.9 billion in 2018, with the aim of entering the hot drinks market and reducing its exposure to sugary soft drinks. However, the strategy has not brought the expected results: Costa’s poor performance has long been a problem, so the group is now considering an exit.

The proceeds from the sale are estimated to be well below the purchase price six years ago. Analysts say Costa could currently be sold for no more than £2bn – a loss of billions of pounds for Coca-Cola.

Extensive network, mixed results

Costa is the UK’s largest city-centre coffee chain, with more than 2,000 stores in the UK and more than 3,000 worldwide, employing around 35,000 people. The chain’s 2023 financial report showed revenue of £1.22bn – up 9% on the previous year but down from £1.3bn before the takeover.

Despite the poor results, Costa, owned by Coca-Cola, has paid out more than £250m in dividends. The company has also expanded internationally, operating in dozens of countries and operating thousands of coffee machines under the Costa Express brand.