Coca-Cola has engaged restructuring specialists at Costa Coffee following its unsuccessful attempt to sell the coffee chain last year. The company has brought in AlixPartners to conduct an operational review and Alvarez & Marsal to provide financial advisory services. These moves suggest that Coca-Cola is preparing to implement cost-cutting measures after several challenging years for the business.

Costa Coffee, which operates approximately 2,700 stores in the UK and roughly 1,300 outlets internationally, also distributes coffee through vending machines in retail locations and supermarkets. The chain employs about 16,000 people across the UK. Since its acquisition from Whitbread in 2018 for nearly £4 billion, Coca-Cola hoped to establish a significant presence in the coffee market through Costa, but the brand has struggled to achieve profitability.

Recent financial results underscore these difficulties. The company’s operating losses nearly doubled, increasing from £5.8 million to £13.5 million in 2024 against revenues of £1.2 billion. Costa faces mounting pressure in the UK market, competing not only with coffee chains such as Starbucks and Pret but also contending with consumer sensitivity to rising coffee prices. Alongside heightened competition, operational costs have surged, including wages and energy expenses. The cost of coffee beans reached record levels in 2025, further straining margins. Prices for common items like a latte have risen sharply; before the COVID-19 pandemic, a Costa latte typically cost between £2.50 and £3, but in some locations, prices now exceed £4.

In mid-2025, Coca-Cola’s then-CEO James Quincey acknowledged that Costa had not met the company's expectations, describing the performance as “not where we wanted it to be” and falling short of delivery targets. By August of that year, Coca-Cola was actively working with the investment bank Lazard to identify potential buyers. However, in January 2026, the company abandoned the planned sale after Costa lost its position as the UK’s largest coffee chain to Greggs. Industry insiders have indicated that Coca-Cola is unlikely to relist the chain for sale in the near term.

One potential strategy under consideration is a partial sale or franchising arrangement with existing partners who currently operate hundreds of Costa outlets. These developments come as Coca-Cola seeks to stabilize and restructure the brand amid tighter market conditions and ongoing cost challenges.