Costa Coffee reported a loss last year, even though its revenue increased by more than £100 million, according to filings.
The chain, which runs approximately 2,600 cafes across the UK and Northern Ireland and over 3,900 locations globally, posted a pre-tax loss of £9.6 million in 2023.
This represents a significant decline from the £245,950 profit Costa reported in 2022.
The Coca-Cola-owned company saw its revenue increase from £1.11 billion in 2022 to £1.22 billion in 2023.
However, Costa attributed the loss to inflationary pressures, including rising energy costs and increased staff wages.
Dividend income from Costa’s subsidiaries fell sharply, dropping from £245 million in 2022 to just £1 million in 2023.
Despite the decline, the company still paid an £85 million dividend to European Refreshments Unlimited Company, Coca-Cola's Irish subsidiary, in February 2023.
In the same month, Costa sold its 142 stores in Poland and Latvia to Lagardère Travel Retail, the master franchisee for the region.
An additional £80 million dividend was paid to European Refreshments Limited in April of this year.
In the company's accounts, finance director Jane Carlin stated that: “The company continued to invest in new retail stores, renewing existing sites and proposition development.
“The growth in revenue, year on year, generated incremental gross margins; however, inflationary pressures on the cost of goods, including energy and payroll, and the impairment of the company’s investments in two of its subsidiaries resulted in an operating loss for the year.”
Costa Coffee was established in 1971 by Italian brothers Sergio and Bruno Costa.
The company was acquired by Whitbread in 1995 and later sold to Coca-Cola for £3.9 billion in 2019.