Costa Ltd reported an operating profit of £20 million in the financial year ending 31 December 2025, the company announced. The previous year, the chain recorded a loss of £13.5 million, and the year before that a loss of £5.8 million.
The core coffee business returned to profitability following a refresh of the chain’s high street stores and an expansion of the range to include iced drinks, matcha, and fresher pastries. Revenue rose by 5 per cent to nearly £1.3 billion, compared with a 1 per cent rise in 2024.
Costa has 2,700 branches in the United Kingdom and Ireland out of a total of 4,000 globally, employing around 20,000 people. Last year, it opened a net 50 new branches in the UK, the first net growth in several years. The company plans to open a further 50 new branches in the UK this year, including more drive-through outlets and high street locations.
Costa’s chief executive, Philippe Schiallee, said the chain had recorded its strongest growth in visits in a decade. Schiallee was seen drinking a Velvetino, a low-calorie iced coffee drink popular with younger customers. "The café is increasingly a destination for morning and afternoon. People are not just seeking caffeine, but also iced herbal teas and drinks to enjoy in the afternoon and evening," he said.
Sales growth is being driven by demand from younger consumers for caffeine-free coffee and other options, alongside growing concerns about the consumption of caffeine in the afternoon. At the same time, the market for traditional coffees is seeing strong competition from chains such as Greggs, Greggs, and Caffè Nero, alongside a growing number of smaller operators. Costa states that it is now the largest seller of matcha via coffee shops in the UK.
The company’s new headquarters is located in St Albans, Hertfordshire, and will have space for 300 employees when it opens in January. "This really shows our confidence in the business," said Schiallee. Costa plans to refurbish around 250 stores per year, having already refreshed more than 1,200 of the 1,700 company-owned branches. This includes the addition of digital self-service kiosks, which are already present in 200 branches in the UK.
The group is also selling more Podio office coffee machines, launched in May, designed as a "barista in your office". Schiallee says Costa is already the third largest brand in the UK in the home coffee machine category and that the potential there is "unlimited".
Costa’s owner, Coca-Cola, officially confirmed in February that it had abandoned plans to sell the chain after offers failed to meet its expectations. Coca-Cola bought the UK’s largest coffee chain for £3.9 billion in 2018 from Whitbread, owner of Premier Inn hotels. Since then, the chain has struggled with rising costs, particularly increases in coffee bean prices, and competition on British high streets.
Schiallee said that coffee production – and potentially prices – remain high and could be affected by the global climate phenomenon El Niño, which is impacting coffee and cocoa growers in Latin and South America. "We must be prepared for this," he said.
