Cote sees pre-tax loss widen to £42m, despite 4.1% increase in like-for-like sales: Cote, the French brasserie brand, posted a pre-tax loss of £42,930,000 in the year to 29 September 2024 (2023: £28,060,000) as it reported a 2.9% increase in turnover to £153.2m. The business, which last October was acquired by The Kararli Group, achieved like-for-like sales growth of 4.1% in the period, supported by a new menu and service style, as well as an upgraded restaurant estate. The circa 70-strong business described the performance as “a credible result against a backdrop of persistent economic pressures and an unsettled political environment, with consumers facing continued pressures to their cost of living through inflation and high interest rates, influencing discretionary spending habits”. During the period the business, which earlier this month parted company with chief executive Emma Dinnis, said it invested in “significant marketing activity” including two campaigns totalling £1.4m, targeting out of home and digital media channels helping to “drive awareness and affinity to the brand to three-year highs”. Gross profit margins and ongoing operating expenses were relatively flat compared to the prior year resulting in an adjusted Ebitda loss of £6.7m (2023: £8.3m loss). However, exceptional costs increased to £16.2m (2023: £1.6m) primarily because of the impairment of historic goodwill, brand and other intangibles (£15.5m) that had arisen following the acquisition of the trade and assets of the business back in September 2020 by Partners Group. The business said: “As part of our long-term strategy to ensure our estate is fit for the future, seven loss making sites were identified for disposal owing to the change in footfall patterns post pandemic, avoiding further recurring Ebitda losses of £0.9m. Since the year end, management took the decision to exit further loss-making sites, right-sizing the estate to ensure the core business is a sustainable base from which to grow. This included the full refurbishment of eight sites and the freshening up of further sites across the cote estate with a total of £8.7m invested in the financial period. Trading results from our refurbished brasseries show strong sales growth in line with management’s expectations, together with positive feedback from our guests. Gross profit margin has improved from 34.6% in 2023 to 35.1% in 2024 despite a 9.7% increase in national living wage and inflationary cost pressures across our supply chain. Management appointed a third party to review key supplier contracts to explore mitigations of these pressures.” Since the year end, the business said it has continued to face competitive and economic pressures affecting the trading environment. It said: “In April 2025, we saw the tax rate for National Insurance increase as well as a reduction in the threshold at which contributions begin. At the same time, the national minimum wage increased by 6.7%, one of the largest year-on-year increases across our cost base. The business needed to mitigate these cost pressures where possible and constantly review the competitiveness of our supply chain pricing, as well as the need for different services we pay for. In preparation for a sale, a scenario was proposed that removed significant cost from the business including a headcount reduction in the support office, a complete review of all operating costs and processes, and strengthening key levers in the P&L such as cost of sales and labour. The continued strong brand equity and the plan for the future attracted a lot of interest, and resulted in a sale of parent company Better Taste Holding 2 Ltd to the new owners, KaraIi Group, who will be able to use other brands in their portfolio and future acquisitions to continue to strengthen the synergies and cost productivity.”

 

Starbucks set to open thousands more coffee shops globally: Starbucks is planning to open thousands more coffee shops around the world and make them more inviting places to linger, even as competitors focus on speedy drive-through and mobile order options. The FT reports that the Seattle-based beverage and food chain intends to add more than 2,000 stores globally in fiscal 2028, chief financial officer Cathy Smith said at an investor event. That would be more than three times the sum planned this year and mark a return to growth after Starbucks shuttered hundreds of poorly performing stores in September. In the US, Starbucks planned to build 400 new company-run stores in 2028 and was considering opening up to 5,000 more afterwards, said chief operating officer Mike Grams. The stores would be mainly in the central, southern and north-eastern regions. In those areas Starbucks has encountered fierce new competition from coffee chains, including drive-through businesses such as 7 Brew and Dutch Bros, which sell drinks through tiny structures that are cheap and quick to build. More than 60% of Starbucks customers still entered its cafés to place their coffee orders, chief executive Brian Niccol told investors and analysts. “Our cafés are our point of differentiation,” he said. “It creates a halo. If you walk into a place and there’s nobody sitting in the seats, or it’s a soulless place, you don’t feel great about what you just ordered.” Smith said newly built coffee houses will be “omnichannel”, serving drive-through, mobile, deliveries and in-café orders, except for urban neighbourhoods where drive-through is impractical. But Starbucks executives shared a new building format the company is calling the Ristretto, the name of a type of espresso shot that means “narrow” or “restricted” in Italian. The design is smaller than a typical café but still contains comfortable seats and a coffee bar. The ‘Ristretto’ design would aim to cut the average building costs by about a fifth. Starbucks has nearly 23,000 stores outside of the US. The company said it could nearly double that figure to about 40,000 locations.

 

Lussmanns acquired out of administration for £110,000: Lussmanns, the independent brasserie group backed by sector investor Luke Johnson, was acquired out of administration for a total consideration of £110,000, Propel has learned. Propel revealed last December that the business had undergone a pre-pack administration, after being impacted by the increase in employers’ national insurance contributions, and the failure of its site in London’s Highgate. Lussmanns, which continues to be backed by Johnson, closed its Highgate site and its Five Bells by Lussmanns in Berkhamsted, but continues to trade from its restaurants in Hertford, St Albans, Hitchin, Harpenden, and Woburn. The administrators report stated: “The company had traded successfully in the early years and had steadily expanded, opening new restaurants in Hertford, Berkhamsted, Highgate and Woburn. However, like many in the sector, the company suffered from the following: Increased labour costs – due to the rising minimum wage and the increased employer NI percentage and threshold. Food price inflation – due to price increases in ingredients which reduced gross profit margins. Increased overheads – due to the rise in rent, utilities and insurance across the seven premises. Reduction in trade – due to the cost-of-living crisis which resulted in a reduction in discretionary spending and, as a result, a 15% reduction in sales since June 2024. In addition to the above, the Berkhamsted and Highgate restaurants had been loss-making since they opened in 2021 and 2024 respectively. The rent for both premises was substantially higher than other restaurants in the group and the Berkhamsted area was saturated with competition from other restaurants whilst also suffering a reduction in population. Whilst the restaurants had consistently good reviews and the directors had introduced various cost­-cutting measures to tackle the above, the company accrued arrears with HMRC which it could not discharge. The company entered into TTP agreements with HMRC in respect of VAT and PAYE, which it had adhered to but due to the loss-making Berkhamsted and Highgate restaurants, it was unable to meet its current VAT and PAYE liabilities which fell due in late 2025.”

Sparkling wine is ‘choice of millennials’: Millennials are flocking towards English sparkling wine amid a “generational shift”, the boss of Chapel Down has claimed, as the winemaker raised its profit and sales forecasts following a strong Christmas. The Times reports that James Pennefather, chief executive of the UK’s largest wine producer, said younger drinkers continue to move into the category amid demand for a “lighter, fresher, crisper style of wines”. He said Chapel Down dispatched more than one million bottles of sparkling wines for the first time last year despite “continued economic pressures”. “Consumers are now choosing Chapel Down throughout the year and for a broader range of celebration occasions than other high-value sparkling wines, which gives us a significant opportunity for future sustained topline growth”, he added. Chapel Down said net sales revenue of its sparkling wines rose 28% to £13.5m for the year to 31 December 2025, while its other wines were up 6% to £4.7m. The Kent-based company, which is backed by the billionaire Lord Spencer of Alresford, told shareholders it expects net sales revenue to come in at £19.4m for last year, slightly above City expectations. Growth was driven by supermarkets, shops and off-licences, where sales jumped 38% to £9.4m as a result of new listings and promotional campaigns. Revenue via pubs and restaurants rose 5% to £2.5m.