Costa Limited posts a 20 million pound profit after two years of losses

For the new menu to explain the whole recovery, each extra pound of sales would have had to add more than 50p to operating profit ^[4]. Revenue at Costa Limited rose 5% to almost 1.3 billion pounds, after 1% growth in 2024 ^[5]. That is roughly 60 million pounds of extra sales ^[3], against a profit swing of 33.5 million pounds ^[1]. That can happen when rent and wages are largely fixed. The published account of the filing does not break out costs, so the part of the turnaround that came from what Costa sells cannot be separated from the part that came from what it spends ^[1].

The menu changes are aimed at the afternoon. According to the Guardian, younger customers are buying decaf and other alternatives because they worry about caffeine later in the day ^[6], while Greggs, Gail's, Caffe Nero and smaller operators compete hard on classic coffees ^[7]. "The coffee shop is increasingly a destination for morning and afternoon. People not only want caffeine but iced herbal teas and those drinks that people will drink in the afternoon and evening," Schaillee said ^[8]. Costa says it is now the UK's largest seller of matcha through cafes ^[9].

The margin leaves little room. Twenty million pounds on almost 1.3 billion is about 1.5% ^[2]. Since 2018 the chain has struggled with rising costs, bean prices above all, and with competition on the high street ^[10]. Schaillee said coffee supply and prices could be affected by El Nino, which is hitting coffee and cocoa growers in Latin and South America ^[11]. "We need to be prepared for that," he said ^[12].

Coca-Cola's decision to keep the chain ^[19] means refits and openings now have to be paid for out of that margin. The refit programme has fewer than 500 company-owned outlets left, about two years of work at 250 a year ^[8]. After that, I'd expect growth to depend on new sites and on the menu. Schaillee said the new St Albans headquarters, with space for 300 staff when it opens in January, "really signals our confidence in the business" ^[13].

The group figures complicate the picture. On the reported numbers, the shop arm is about three-quarters of Costa Group's sales and about a fifth of its operating profit ^[5]. Group operating profit rose by roughly 23 million pounds ^[6], about 10 million pounds less than the shop arm's swing ^[7]. If the two sets of figures cover comparable ground, the rest of the group earned less in 2025 than in 2024. That side sells beans and pods in supermarkets and machines to households, homes and offices ^[14]. The Companies House filing and the group totals may be drawn on different bases. Schaillee said Costa was already the UK's third biggest home coffee machine brand and called the potential there "limitless" ^[15].