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Have we reached peak Costa Coffee?

The Guardian logo The Guardian 31/01/2018 Nathalie Olah
© Getty

It was voted the nation’s favourite coffee shop for the eighth year running last month and this week announced its latest branch: on the cobbles of Coronation Street in a groundbreaking product placement deal.

Yet last month, Costa Coffee announced that its sales dipped by 1.5% in the third quarter of 2017 – only the second time they have fallen. The chief executive of Whitbread – which owns Costa –put it down to a “structural shift to online shopping”.

Related: Costa in a froth over troubling sales figures

So, have we passed peak Costa? To live in Britain in 2018 is to wonder whether the coffee franchise has started self-replicating. It appears not only on our TV screens, but also along our roads and in our railway stations, hospitals, pubs and cinemas.

It’s quiet and I can sit here for a long time and no one bothers me
Valbona, Costa customer

Costa has come a long way since the original shop was set up in 1971 by the Costa brothers, Italian immigrants who sold the business in 1995 to Whitbread for a reported £23m (Costa made £61m in profit in the first half of last year alone). There are now more than 2,300 Costa stores in the UK. Compare that with 956 Starbucks and 675 outposts of Caffè Nero and you begin to see just how successfully the chain has conquered the UK.


There are three Costa units at the Merry Hill shopping centre in Bierley Hill, near Dudley, three in the Trafford Centre in Manchester, and four in the Metrocentre in Gateshead. That is not to mention the 6,000-plus Costa Express vending machines installed across the country, nor the 1,334 stores operating globally, including 29 in Bahrain and 10 in Kazakhstan.

It’s a grind… a Costa barista at work © Getty It’s a grind… a Costa barista at work

Despite the sector reporting annual growth of 7.3% and turning over a cool £9.6bn in 2017, according to market research firm Allegra’s World Coffee Portal, branded coffee chains in the UK are expanding at a slower rate than in previous years. The trend is attributed to shrinking disposable incomes, but also to the rise of independent coffee shops and smaller chains, which are increasingly popular outside of the metropolitan centres in which they were born. Coffee #1 – now owned by Welsh brewery Brains – Joe & the Juice, Gail’s, Department of Coffee and Social Affairs, Grind & Co and Notes are all expanding to give the established chains a run for their money. Can Costa’s dominance last in a world of beard-stroking baristas?

Related: Will a 25p charge change Britain's throwaway coffee cup culture?

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One person who thinks so is Valbona, whom I meet in my local Costa in Peckham, south London, home to about a dozen artisanal coffee shops. She is sitting with her sister and two friends and tells me that she drinks in Costa daily. “I love it here,” she says. “I come here alone or with my friends every day; the staff know me and I like them. It’s quiet and I can sit here for a long time and no one bothers me.”

She nurses a large – huge, in fact – soya latte. Bowl-sized mugs have become a signature of the Costa brand. Even the espressos fill a good-sized cup. Valbona and her friends tell me they would always choose Costa over Caffè Nero and Starbucks, even if the alternatives were closer. When I ask why, Valbona shrugs: “I just like it here more. We can sit here and talk.” What about the fancier coffee shops further up the road? Valbona draws a blank and shakes her head. “I just like it here,” she repeats.

© Getty

Despite Valbona’s feeling of anonymity, the shop is full. Couples, whole families, students and individuals on laptops fill every seat. There is a sense of it being a free space in which to meet, talk and read the papers, more so than in other coffee chains, where a grab-and-go clientele seems more common.

But free it is not. One of the more mystifying aspects of Costa’s popularity concerns its pricing. While its regular-sized cappuccino averages 30p cheaper than Caffè Nero or Starbucks, the prices start to even out when you look at different sizes and flavours, with a small cappuccino costing more than at either of its main competitors. Plus, you might assume that the ubiquity of Costa would have cheapened the brand, making the price point less justifiable. But you would be wrong.

According to Whitbread representative Esme Knight, its ubiquity is exactly what makes Costa the coffee shop of choice in Britain. “We have different models for being at a drive-thru, at a petrol station or in store,” she says. “The idea is that a customer can get a Costa coffee at their greatest convenience, whether that is en route to somewhere or while out shopping on their local high street on a Saturday afternoon.”

At Wetherby services on the A1 between York and Leeds, there are seven outlets at which one can purchase a Costa coffee; Exeter services on the M5 boasts five. Points of transit have become the battleground in Britain’s coffee wars, and the high-street retailers’ supremacy is being challenged by the independents. London-based coffee company Grind, whose roastery is in Shoreditch, plans to open several units at airports and stationsin 2018.

“The footfall means that the difference between the volume of coffee we would usually serve in our existing locations and what we would serve in a train station or airport is phenomenal,” explains the company’s creative director, Teddy Robinson. “For such a long time you got a low standard of product in these holding areas or points of transit and we are really hoping to change that.”

However, Grind faces a challenge that Costa does not: to dismantle the haughty reputation of independent coffee shops, particularly outside of major cities. Costa’s success – particularly among people who associate this with a delusional, metropolitan middle-class –is due in part to the fact it does not sell the finest artisanal brews. Of all the modern subcultures, coffee is one of the most exclusive, impenetrable and absurd, with tribes formed around the cult of the AeroPress, varieties of Chemex and even nitrogen-infused cold brew.

Whitbread was masterly at shifting from pubs to coffee as its principal form of hospitality provision

Jonathan Morris

With its plain-clothes alternative, Costa offers a safe space for the likes of Valbona to meet with friends, talk or work. Costa’s biggest competitor – outside of London, at least – is probably Greggs, with more than 1,700 stores nationwide selling coffee. Allegra counts only 498 of those as boasting more than 12.5% turnover from hot beverage sales, but this is likely to change, with reports claiming that the pastry chain is now the fourth-largest importer of coffee in the UK. Both companies are now integral to the British high street in the way that grocers, butchers and pubs were in the past – and they seem to have replaced them as centres of the local community.

As Jonathan Morris, a historian of coffee at the University of Hertfordshire, observes: “Whitbread was astute at recognising that what was originally a premium experience could be shifted into a mainstream one. The new needs of a more time-autonomous society meant that coffee shops could indeed become sites for hosting social gatherings, meeting places, spaces for relaxation or, for that matter, individual working spaces or places for off-site meetings.”

Morris argues that the no-alcohol atmosphere of the coffee shop is key to this. “It made it much more welcoming to customer groups such as women, families with children, the more mature and semi-retired, while the emphasis on daytime operating hours coincided with a similar shift towards daytime socialisation,” he says. “Whitbread was masterly in terms of shifting from pubs to coffee as its principal form of hospitality provision.”

But if Starbucks represents the kind of distant consumerism that Britons often reject for being too American and Caffè Nero symbolises the sophisticated, European consumerism that makes us feel oafish and uncouth, then part of the success of Costa lies in its ability to reach a middle ground – and to offer it with a smile. It provides no-airs-or-graces coffee, with a reassuring mass-produced quality to its stores. To set foot in a Costa is to be soothed by familiarity in an environment that is crafted using carefully mismatched furniture and calligraphic wall decorations that we have seen somewhere else – perhaps at one of the three Premier Inns outside Luton airport, also constituents of the Whitbread empire. There is something reassuring in the sterility – the appearance of cleanliness, if not quality – as you settle in on a pleather sofa scattered with coarse, stripey, velour cushions. The seasoned Costa visitor will have noticed an attempt in recent years to update, using scribbled typefaces on faux chalkboards and cake stands to display baked goods. It is an aesthetic to mirror that of Bar+Block, Whitbread’s latest venture, which specialises in quality steak and boasts “rustic design elements including timbers, exposed brick walls and warm lighting”.

Add to that a product range that is distinctly more Brexit than its American and faux-Italian counterparts and you have all the Kirstie Allsopp trimmings to make Britons feel at home, right down to the oversized Jammie Dodgers and Bourbon biscuits in place of Johnny Foreigner croissants or pannetone (of which there are some, but tucked away by the till, behind an arrangement of gingerbread biscuits).

And the drinks? The verdict from Grind’s head of coffee, Sam Trevethyen, is unsurprisingly tepid. “Costa coffee is very bitter,” he says. “Roasting it this much means they can serve these very large drinks and still be able to taste the coffee through the sheer volume of milk.

“This is something we see a lot on the high street. With coffee this dark, it will only ever taste one way, regardless of who makes it. Imagine taking a very good and a very bad cut of steak and cooking them both until dry; you would be hard-pressed to tell the difference.”

Perhaps Costa needs to up its coffee standards if it wants to continue to dominate. Then again, perhaps those bright-eyed indies have underestimated how far Britons will go to defend bone-dry steak.

NOW SEE: Sales crashing, closures soaring: the UK high street is in crisis

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