Why did Costa Coffee losses double in 2024?

Losses widened to £13.5m due to higher input costs, notably Arabica coffee prices, and intense value competition in the UK. Pricing could not fully offset costs without risking demand. The mix of store expenses and a cautious consumer also weighed on margins and cash generation.

What would a Coca-Cola Costa sale mean for the UK market?

A sale near £2bn would reset Costa’s valuation and strategy. New ownership could prioritise cash flow, franchise growth, or operational efficiency. For the UK sector, it would mark a major shift in branded coffee, with implications for suppliers, landlords, and rivals competing for locations and customer loyalty.

How do Arabica coffee prices affect Costa margins?

Coffee beans are a core input, so higher Arabica coffee prices lift cost of goods. Chains can hedge and adjust menus, but full pass-through risks lower traffic. Persistent input inflation tightens store-level profits and contributes to Costa Coffee losses until costs normalise or pricing and mix improve.

What should UK investors watch over the next quarter?

Track M&A news on the Coca-Cola Costa sale, any trading update on holiday and January performance, and commentary on costs. Watch footfall trends and loyalty engagement. Early signs of better mix, higher attachment rates, or easing input prices would point to stabilising margins and improved cash flow.

Global Market Insights

January 2: Costa Coffee Losses Double as Coca-Cola Weighs Sale

ByDanny Kontos January 2, 2026January 2, 2026

Costa Coffee losses doubled in 2024 to £13.5m in the UK, and reports say Coca-Cola is weighing a sale near £2bn, far below the £3.9bn it paid in 2018. We explain what is driving the pressure, how Arabica coffee prices and UK coffee competition shape margins, and why high street footfall matters for demand. Investors should consider the M&A path, input costs, and any operational changes that could reset profitability and valuation in the months ahead.