Dubai – Qahwa World
Caffè Nero is pressing ahead with its international expansion, even as it warns that the price of a cup of coffee is likely to keep climbing. The premium coffee house group cited a volatile mix of geopolitical conflict, rising labor costs, and climate-driven supply shortages as the primary drivers behind the anticipated hikes.
The family-owned business, which operates 1,151 outlets globally, is targeting significant growth this year. The group plans to open 30 new stores in the UK and up to 70 additional locations across its 10 international markets. This expansion follows the recent acquisition of Washington D.C.-based Compass Coffee, a move that integrated 15 new sites and a dedicated roasting facility into the brand’s North American infrastructure.
- A Different Rhythm
Gerry Ford, who founded the chain in 1997, suggests that Caffè Nero’s private ownership has allowed it to weather the current economic storm better than its publicly traded rivals. While competitors like Starbucks and Costa have struggled with store closures or stalled sales plans, Ford attributes Nero’s resilience to a “steady pace” and longer-term planning.
“We don’t want to take over the world,” Ford noted. “We have more flexibility because we aren’t trying to hit a quarterly reporting target. We move to our own rhythm.”
- Financial Headwinds
Despite a 13% jump in annual sales to £587.6 million, the group’s pre-tax losses widened to £41 million. This was largely due to the rising cost of servicing its £481 million debt, fueled by recent interest rate hikes and a string of strategic acquisitions, including 200 Degrees and Harris + Hoole.
To manage these costs, Ford confirmed that the group will pause further acquisitions for at least a year to focus on integrating its latest purchases and meeting upcoming debt repayments.
- The Cost Crisis
The industry is currently facing a “perfect storm.” Coffee prices tripled between 2023 and early 2025 as the climate crisis ravaged crops in Brazil and Colombia. While wholesale prices have recently stabilized, they remain nearly double what they were three years ago.
Ford warned that consumers shouldn’t expect relief at the till anytime soon. The ongoing conflict in the Middle East continues to drive up energy and shipping costs, while rising business rates and wages in the UK add further pressure. Data shows that the average price of a latte has already surged by 35% over the past five years, now sitting at approximately £3.76.
Despite these challenges, Ford remains bullish on the future of the specialty coffee sector, insisting that there is still plenty of “white space” for independent, premium brands to thrive globally.
