Temporary closure of most Costa Coffee stores in Europe during the second quarter of 2020 leads to sharp fall in Coca-Cola’s revenues, of which around half are reliant on out-of-home channels
Out-of-home channels account for around half of Coca-Cola's revenues according to the US beverage giant | Photo: Costa Coffee
It its second quarter earnings statement The Coca-Cola Company reported net revenues fell 28% to $7.2bn. The reduction was largely due to coronavirus pressure on out-of-home channels, which account for around half of the US beverage giant’s revenues, the company said.
Revenues at Coca-Cola’s Global Ventures business, which manages the Costa Coffee business it purchased for $4.8bn in 2018
, were down 53% during the three months to 26 June 2020. This was largely due to temporary coronavirus closures across most of coffee chain’s Western European stores during the period. Costa Coffee store closures also contributed to a 31% reduction in Coca-Cola’s coffee and tea sales.
UK-based Costa Coffee is the largest coffee chain in Europe
, operating around 3,200 stores across 19 countries across the continent before the pandemic struck. Costa Coffee is, however, tentatively beginning to reopen its stores and plans to have more than 2,000 of its 2,700-strong UK portfolio operational by the end of July 2020.
In a press statement, Coca-Cola said that although there remained a ‘high degree of uncertainty’ for the rest of 2020, the company was entering a period of recovery as lockdown restrictions begin to ease across many of its key markets.
"I'm proud of the people of the Coca-Cola system as we continue to adjust and accelerate our strategies in this fast-changing landscape," said Coca-Cola CEO James Quincey
. "We believe the second quarter will prove to be the most challenging of the year; however, we still have work to do as we drive our pursuit of 'Beverages for Life' and meet evolving consumer needs," he added.