Business
How coffee chains like Costa lost the matcha generation
Rachel Clun & Connie BowkerBusiness reporters, BBC News
BBCLucy Williams is enjoying an iced strawberry matcha after going with her sister to her niece’s first-ever haircut.
“I feel like a strawberry matcha is a coming out with your sister thing, rather than an everyday thing,” she says.
But here in the UK, you can’t get an iced strawberry matcha – or any kind of matcha at Costa Coffee.
Lucy is at Blank Street Coffee where a rainbow array of matcha drinks have gained the chain a cult following, including celebrity fans Molly-Mae Hague and Sabrina Carpenter.
Lucy drinks coffee at home every day, but buys a barista-made cup for when she wants a treat.
“There are only certain places I’d go for a coffee,” she says and Costa is not on her list.
Costa’s owner Coca-Cola is reportedly looking to sell the chain, with one analyst suggesting it could go for £2bn – about half of the $4.9bn (£3.9bn) it paid in 2019. So is something going wrong?
The Boston Globe via Getty ImagesCoffee and tea drinking trends are changing particularly among younger generations, analysts say, and when combined with higher coffee prices and cost of living pressures in general, chains like Costa are in hot water.
But not Blank Street which began in 2020 as a tiny coffee cart in the garden of a Brooklyn diner before expanding across New York, Washington and Boston. It opened its first London store in 2022 and now has about 35 in the capital with three more in Manchester, two in Birmingham and two in Edinburgh.
Its popularity has in part been driven by its TikTok appeal, with fans posting videos of themselves ordering in its minty fresh decorated cafes or at free tattoo pop up events.
For Australian travellers Bree Taylor and Rebecca Trow, both 27, Blank Street was on their London to-do list after seeing its pastel-hued drinks on TikTok.
“We saw it and were like ‘we have to go there’. We saw it and came here specifically. We wanted to try it,” says Rebecca.
Lauren Nicholson, 24, and Jordan Brookes, 27, were also drawn to the cafe for its brightly coloured matcha which cost just under £5 each.
Jordan says he started drinking matcha about two months ago and is now “hooked”.
He’s not the only one – the worldwide matcha craze means supplies of the bright green Japanese tea are drying up and the demand is pushing up prices.
Costa’s rivals have jumped on the trend with Starbucks and Pret offering an iced matcha latte and Nero a strawberry and vanilla iced matcha latte.
And it is not just a London thing – popular national chains like Gail’s and Black Sheep Coffee make it. The latter offers green matcha waffles too.
Seeking out a new luxury drink as an affordable treat is a trend that emerged since Covid and has continued to grow as the cost of living remains high.
“If you think about a lot of gen Z, they’re looking at matcha, they’re looking at brews, they’re more healthy. My late teenagers, they don’t drink caffeinated beverages at all,” says Danni Hewson, head of financial analysis at AJ Bell.
Traditionally, matcha is considered to contain antioxidants and have a more tempered caffeine effect than the “high” and “crash” of regular coffee but there is some debate over any proven health benefits.
Alongside standard coffees, Costa serves a variety of frappé and fruit coolers, but these contain syrups and can be topped with whipped cream which may not appeal to the clean-living green-juice sippers among us.
With the rising popularity of home coffee machines, chains have to come up with special reasons to get customers through the door.
Getty ImagesCosta is not the only brand struggling with the changing UK coffee market, says Clive Black, vice chairman of independent investment group Shore Capital.
The rise of smaller chains and artisanal independent stores have also “eaten into the share” of the major chains, he adds.
Young people increasingly care about spending choices – Lauren and Jordan both say they generally avoid big coffee chains in favour of supporting smaller businesses, but also because of considerations about the taste.
And when a coffee can cost you the best part of £5 you expect something you can’t make yourself.
“A straight up latte isn’t a treat, that’s a necessity,” says Clare Bailey, independent retail analyst and founder of The Retail Champion.
“I feel like businesses that don’t reimagine themselves and don’t respond to consumer behaviour, and perhaps get a little complacent, are the ones who end up in trouble,” she adds.
Coca-Cola’s chief executive James Quincey admitted to an investor call last month Costa was “not where we wanted it to be” and the company was “thinking about how we might want to find new avenues to grow in the coffee category”.
Costa began as a London roastery in 1971 and has since expanded to more than 4,000 stores and with operations in 50 countries. It is a prominent feature of many a high street in small towns across the country, often appealing to families.
In the 2023 financial year, the most recent report, Costa reported revenues of £1.2bn, but said inflationary pressures including increased prices of goods, energy and pay resulted in an operating loss of £14m.
Now Coca-Cola is working with investment bank Lazard to explore its options for the coffee chain, including a potential sale, according to reports from Reuters and Sky News. Clive, from Shore Capital, says it is not clear why Coca-Cola bought Costa in the first place.
Costa, Coca-Cola and Lazard were all approached for comment.
There are now 11,450 branded coffee chain outlets across the UK, up from 9,800 five years ago, according to World Coffee Portal.
And the number of independent coffee shops has also risen over the last five years from 11,700 to around 12,400 now.
With so much choice, competition to attract customers heats up. Mimoza Emsa, 47, says while she used to drink Costa, she now always goes to Pret because it’s close to her work and she has its subscription which offers discounts.
“It’s really convenient. It’s one of the things that persuades me to have coffee here,” she says.
Costa and similar chains are not as quick and cheap as a Greggs or McDonalds coffee, but also don’t offer the higher-end experience for when we want to treat ourselves.
“We’ve seen all these middle of the road retailers struggle because they’re neither one thing nor the other,” says retail analyst Clare.
Despite these shifts, Costa still has loyal customers.
Rafik Khezmadji, 37, says he comes to Costa because it’s close to work, but he also enjoys being able to sit outside and savour his coffee.
“I enjoy having this moment to myself,” he says.
For 20-year-old fashion business student Megan Penfold the coffee at Costa is “not the worst and not the best”. She has stopped at the cafe on Wigmore Street in London for a quick black coffee.
“Trends don’t affect me as much. I like what I like,” she says.
Correction: An earlier version of this story said Coca-Cola bought Costa for £4.9bn in 2019. The figure was actually $4.9bn, which was worth about £3.9bn.
New Delhi: The All India LPG Distributors Federation has appealed Finance Minister Nirmala Sitharaman to reduce the Goods and Services Tax (GST) on LPG Suraksha Hoses (LPG pipes) from 18 per cent to 5 per cent. In the run up to the two-day GST Council meeting that started today, the Federation had written to the Union minister
In the letter, the Federation had stressed that the LPG Suraksha Hose is not a luxury product but a mandatory safety component essential for transporting gas safely from cylinders to stoves. “As LPG is already under essential commodities and distributed under subsidy schemes to millions of families, imposing such a high GST on a safety accessory is contradictory to the government’s vision of “Ujjwala se Suraksha”,” the letter read.
Since August 2015, every household using LPG is required to replace these hoses periodically as per Oil Marketing Companies (OMCs) and Petroleum and Explosives Safety Organization (PESO) guidelines. Currently, the 18 per cent GST rate makes these safety hoses costly for many families, especially economically weaker households, rural consumers, and beneficiaries of the Pradhan Mantri Ujjwala Yojana (PMUY), they argued.
According to the Federation’s President Chandra Prakash, lowering the GST to 5 per cent would not reduce tax revenue instead, it could increase it, as more consumers would purchase authorized BIS-approved hoses rather than cheaper, unsafe alternatives from the open market.
“We assured you that total GST on Suraksha hose will also increase because now a days majority consumers purchasing substandard LPG pipe-Suraksha Hose from open unauthorized market hence loss of GST revenue. We assured yourself that LPG user will buy from oil companies authorized channels partners if GST reduces to 5 per cent instead of 18 per cent,” the letter read.
“This small fiscal step will have a large social impact by strengthening household safety and supporting the government’s vision of Har Ghar Surakshit LPG,” Prakash said in the letter. The two-day meeting, being held on September 3 and 4, is expected to bring significant changes to India’s indirect tax structure, with discussions centred around rationalising and reducing the number of GST slabs.
In the Independence Day speech from the ramparts of the Red Fort this year, Prime Minister Narendra Modi announced upcoming next-gen GST reforms before Diwali so as to benefit consumers, small industries and MSMEs.
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PM Modi says the global chip market is expected to grow from the current $600 billion to over $1 trillion in the coming years, and India would capture a significant share of it.
Prime Minister
Narendra Modi
attends the SemiconIndia Exhibition 2025 at Yashobhoomi, Delhi.
Prime Minister Narendra Modi on Wednesday attended the second day of the SEMICON India 2025 event at Yashobhoomi (India International Convention and Expo Centre), Delhi. PM Modi also examined a nanochip at the event.
PM Modi inaugurated the event on Tuesday, where he said the global semiconductor market is expected to grow from its current value of $600 billion to over $1 trillion in the coming years, and expressed confidence that India would capture a significant share of this growth.
He described chips as the “digital diamonds” of the 21st century, in contrast to the “black gold” of oil that shaped the previous one. He highlighted the rapid progress since the launch of the Semicon India program in 2021, with 10 semiconductor projects now underway with a total investment exceeding $18 billion.
PM Modi emphasised that the government is focused on speed, stating, “the shorter the time from file to factory, and the lesser the paperwork, the sooner wafer work can begin.” To achieve this, the National Single Window System has been put in place to streamline approvals.
He also noted that semiconductor parks are being developed across the country under a plug-and-play infrastructure model to offer essential facilities like land and power. These efforts, combined with incentives, are designed to attract more investment and talent.
He said the world trusts India and is ready to build the semiconductor future with the country.
PM Modi remarked that when such infrastructure is combined with incentives, industrial growth is inevitable. Whether through PLI incentives or Design Linked Grants, India is offering end-to-end capabilities. This is why investment continues to flow in, he emphasised.
On Tuesday, Union IT Minister Ashwini Vaishnaw also presented the Vikram 32-bit processor, developed by Isro’s Semiconductor Lab, along with test chips from four approved projects.
Vaishnaw said, “This is a year, 2025, in which many dreams are coming true. On September 2, the Prime Minister was presented with the first made-in-India chip made by CG SEMI. Three more pilot lines are almost on the verge of completion in the next few months. Our design and talent building capabilities have come up very well. On September 2, we presented the 20 chips designed by students and manufactured at our SCL Mohali facility. On September 2, the flagship event witnessed the convergence of all critical stakeholders of the semiconductor ecosystem including Equipment manufacturers, chemical manufacturers, gas manufacturers, and material manufacturer and that that shows the scale at which we are growing and the confidence the world has on India’s semiconductor journey.”
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More
Read More
Business
Vikran Engineering IPO Sees Muted Listing, Stock Lists At 2% Premium: Should You Buy, Sell Or Hold?
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Vikran Engineering IPO Listing: The stock lists at a premium of around 2% at Rs 99 apiece on the NSE, compared with the IPO issue price of Rs 97.
Vikran Engineering IPO Listing.
Vikran Engineering IPO Listing: Vikran Engineering Ltd made a muted stock market debut on September 3. The stock was listed at a premium of around 2% at Rs 99 apiece on the NSE, compared with the IPO issue price of Rs 97. However, the stock declined into the red and traded down by 2.32% at Rs 94.7 apiece as against the issue price.
The stock had risen in the morning immediately after the listing and hit the day’s high of Rs 101.77 apiece on the NSE, which was 4.5% higher than the IPO price, before plunging into the red.
On the BSE, the stock opened at Rs 99.7 apiece, which is 2.78% higher than the issue price. The stock is currently trading in red, down by over 2.5%.
The company’s market capitalisation (mcap) stood at nearly Rs 2,600 crore.
The initial public offering (IPO) of Vikran Engineering Ltd was open between August 26 and August 29. It received a strong overall subscription of 24.87 times.
Vikran Engineering IPO Listing: Should You Buy, Sell Or Hold?
“Vikran Engineering Ltd made a modest debut on the stock market with a listing gain of about 2.7% over its issue price of Rs 97, opening at around Rs 99.70. The company operates as a leading EPC player in power transmission, water infrastructure, and railway electrification projects with an asset-light model and a strong execution track record,” said Shivani Nyati, Head of Wealth at Swastika Investmart Ltd.
It enjoys robust growth visibility backed by a Rs 2,442 crore order book, supported by government infrastructure spending, she added.
“Investors are recommended to hold their holdings with a stop-loss near Rs 89 to safeguard against volatility, as execution of the strong order pipeline could drive medium-term upside,” Nyati said.
Brokerage firm Master Capital Services in its note said the Vikran Engineering IPO had a debut with a muted listing performance. The stock opened at Rs 99.70, offering a slight premium of 2.7% over its issue price of Rs 97. The IPO saw solid demand, with an overall subscription of 24.87 times, led by exceptional non-institutional buyer interest (61.77x).
Vikran has a good growth opportunity in the infrastructure space, is in demand with a healthy order book and a good execution model with a diversified order book of Rs 24,424 crore as of June 30, 2025, and has a pan-India presence in 16 states. It also has good advantages from government initiatives like the Jal Jeevan Mission and the Revamped Distribution Sector Scheme (RDSS), it added.
“While the current valuation appears to be stretched and cash flow issues remain a concern, the solid running history of execution and a good order book provide a positive long-term outlook on patience for investors,” Master Capital Services said.
The IPO is a mix of fresh issue of shares of about Rs 721 crore and an offer-for-sale portion worth Rs 51 crore by the promoter.
The Mumbai-based company intends to utilise proceeds from the fresh issue to the tune of Rs 541 crore for funding working capital requirements and the rest for general corporate purposes.
Vikran Engineering provides end-to-end services from conceptualisation, design, supply, installation, testing, and commissioning on a turnkey basis.
As of June 30, 2025, the company completed 45 projects across 14 states with a total executed contract value of Rs 1,920 crore. It has 44 ongoing projects across 16 states, aggregating orders worth Rs 5,120 crore.
Vikran Engineering’s revenue from operations increased 16.53 per cent to Rs 916 crore in FY25 from Rs 786 crore in the previous financial year, and profit after tax rose 4 per cent to Rs 78 crore in FY25 from Rs 75 crore in FY24.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More
Read More
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