Costa’s main coffee shop operations have swung to profitability following a strategic overhaul of its retail locations and an expanded menu offering. The chain, which operates 2,700 outlets across the UK and Ireland out of 4,000 globally and employs approximately 20,000 people, reported operating profit of £20m for the year ending in December 2025, reversing prior losses.
Revenue growth at Costa Limited accelerated to 5% in the recent period, reaching nearly £1.3bn, compared with 1% growth the previous year. The company achieved a net addition of 50 outlets in the UK, marking its first net increase in several years, and intends to open another 50 locations this year including additional drive-through and high street stores. Store remodeling efforts have been extensive, with the company having updated more than 1,200 of its 1,700 company-owned outlets and planning to refresh approximately 250 stores annually.
Product diversification has played a central role in the turnaround. The chain has introduced iced beverages, matcha offerings, and fresher pastries to attract younger consumers seeking caffeine-free and lower-calorie alternatives. Costa states it is now the largest matcha seller among UK cafes. Chief Executive Philippe Schaillee noted the chain experienced its strongest growth in customer visits in a decade and emphasized the coffee shop’s evolution as a destination for both morning and afternoon visits.
Operational enhancements include expanded digital self-order kiosks now available in 200 UK locations. The parent Costa Group, which also sells coffee beans, pods, and office coffee machines, reported global sales growth of 3.5% to £1.74bn and a 30% increase in global operating profit to £101m. A new corporate headquarters in St Albans, Hertfordshire, opening in January, will accommodate 300 employees.
The performance comes after owner Coca-Cola officially abandoned plans to sell Costa in February following unsuccessful auction bids. The beverage company acquired Costa for £3.9bn in 2018 from Whitbread but subsequently faced headwinds from rising costs and increased high street competition.
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