Costa Coffee
Costa Coffee is a British coffeehouse chain which is a subsidiary of The Coca-Cola Company. It is headquartered in Dunstable, England.
Costa Coffee was founded in London in 1971 by two brothers Bruno and Sergio Costa as a wholesale operation supplying roasted coffee to caterers and specialist Italian coffee shops. Acquired by Whitbread in 1995, it was sold in 2019 to The Coca-Cola Company in a deal worth £3.9bn, and has grown to 3,401 stores across 31 countries and 18,412 employees. The business has 2,121 UK restaurants, over 6,000 Costa Express vending facilities and a further 1,280 outlets overseas.
The Coca-Cola Company announced its intention of acquiring Costa Limited from parent company Whitbread PLC for $5.1 billion. The deal, which closed on 3 January 2019, gives the cola giant a strong coffee platform across parts of Europe, Asia Pacific, the Middle East, and Africa. It is the second largest coffeehouse chain in the world, and the largest in the UK.
History
Brothers Bruno and Sergio Costa founded a coffee roastery in Lambeth, London, in 1971, supplying local caterers. The family had moved to England from Parma, Italy, in the 1960s. Costa branched out to selling coffee in 1978, when its first store opened in Vauxhall Bridge Road, London.In 1985, Sergio bought out Bruno's share of the company. Bruno went on to found a tableware company. By 1995, the chain had 41 stores in UK, and was acquired by Whitbread, the UK's largest hotel and coffee shop operator, becoming a wholly owned subsidiary. In 2009, Costa opened its 1,000th store, in Cardiff. In December 2009, Costa Coffee agreed to acquire the Polish chain Coffeeheaven for £36 million, adding 79 stores in central and eastern Europe.
In 2018, Whitbread faced pressure from two of its largest shareholders, activist group Elliott Advisers and hedge fund Sachem Head to sell or demerge Costa Coffee, the theory being the individual businesses would be worth much more than as one company. On 25 April 2018, Whitbread announced its intention to fully demerge Costa within two years. Subsequently, Coca-Cola announced a deal to acquire the chain. On 3 January 2019, The Coca-Cola Company completed the acquisition of Costa Coffee for $4.9 billion from Whitbread.
On 20 November 2019, Costa Coffee announced that Dominic Paul would step down as CEO of the company and be succeeded by Jill McDonald.
In March 2020, all UK coffee shops were forced to close indefinitely due to nationwide lockdown rules introduced by the government to limit the spread of COVID-19. In late May, a select few branches reopened for takeaway only, while many more branches opened for drive-through orders.
Products
Costa sells:- Hot drinks – coffees, teas and hot chocolates
- Cold drinks – including Frostino and fruit coolers
- Savoury snacks – including sandwiches and breakfast items
- Cakes and pastries – including cookies, brownies and croissants
- Reusable cups – including limited edition pride cups
Costa Coffee employs Gennaro Pelliccia as a coffee taster, who had his tongue insured for £10m with Lloyd's of London in 2009.
Operations
Locations
Costa Coffee operates 2,467 outlets in the United Kingdom as of October 2019. Overseas, it operates 1,413 stores in 32 countries. The first Costa store outside the UK opened in the UAE in 1999 and, in September 2017, was the first coffee shop worldwide to start delivering coffee via drones to customers sunbathing on Dubai's beaches.Costa Express
Following Whitbread's £59.5m acquisition of Coffee Nation, a chain of coffee machines, the machines were re-branded as Costa Express. The company plans to expand to target hospitals, universities and transport interchanges. In Denmark, Costa Express machines are located in Shell stations. Costa Express machines were previously available in Shell locations in Canada, but have since been removed. In the UK, grocery store chain SPAR has become a major operator of petrol station stores, most of which have Costa Express machines installed.World distribution
As of September 2018, Costa Coffee was available on 3 continents in 32 countries, with 3,882 total locations.| Country | No. of locations |
| United Kingdom | 2,467 |
| Poland | 147 |
| Ireland | 114 |
| Czech Republic | 55 |
| Russia | 35 |
| Hungary | 28 |
| Spain | 25 |
| Bulgaria | 21 |
| Latvia | 11 |
| Malta | 11 |
| France | 8 |
| Portugal | 5 |
| Slovakia | 3 |
| Germany | 1 |
| China | 459 |
| United Arab Emirates | 150 |
| India | 57 |
| Saudi Arabia | 56 |
| Kuwait | 51 |
| Qatar | 30 |
| Cyprus | 24 |
| Bahrain | 23 |
| Oman | 22 |
| Philippines | 16 |
| Kazakhstan | 12 |
| Cambodia | 4 |
| Jordan | 4 |
| Indonesia | 1 |
| Lebanon | 1 |
| Vietnam | 1 |
| Thailand | 1 |
| Egypt | 44 |
| Morocco | 3 |
Controversy
On 19 August 2019 Costa Coffee attracted media attention due to claims of unfair deductions from the pay of its employees. Reports stated that current and former employees had £200 deducted from their pay for training as well as additional deductions for till discrepancies and running costs.Claims of unfair deductions were triggered by a Twitter post suggesting that staff at a Costa store were forced to reimburse money lost to scammers who came into the store.
Trying to distance themselves from the controversy, Costa said contracts for franchise stores are managed by partners and that some staff contracts did have "clauses relating to deductions".
On 23 August additional claims appeared in the media that Costa Coffee franchise workers are "not treated like humans".
The report included managers' alleged refusal to pay for sickness or annual leave, working outside of contracted hours and the retention of tips.
It cited an anonymous former employee at a store under Goldex Essex Investments Ltd who claimed they had almost £1,000 of their holiday pay deducted from their salary, despite being contracted to work 48 hours a week.
The report went on to say that baristas and employees at managerial level have complained about the numerous deductions outlined in Costa Coffee contracts written by franchise partners. A former manager is quoted as saying she had £150 deducted from her wages because she was five minutes late opening the store.
Other fines outlined in the contracts were for used uniform that was damaged when returned to the employer, excessive waste and till discrepancies.
In response to this article a Costa Coffee spokesperson said an independent audit has been launched.