Caffe Nero has £350m sales… but is still in red

Caffe Nero posted an annual loss, despite demand for coffee and snacks returning to pre-pandemic levels.

The red ink means the company, formerly known as ‘Caffe Zero’ for its contributions to the Treasury, has paid just £2m in corporate tax over the past two years. That was despite a turnover of nearly £350 million last year, according to filings with Caffe Nero’s parent company.

The chain runs more than 600 coffee shops in the UK and employs 6,000 people. There is no suggestion that Caffe Nero has broken any tax rules, and the company insists it pays significant amounts in business rates, VAT and through employee contributions. But meager corporate tax contributions have drawn criticism in the past.

Caffe Nero’s profits were wiped out after it paid £35 million in borrowing costs and interest to pay off its mountain of debt. Documents also show it has received £45 million in government aid since 2021.

A spokesman said: ‘Over the past two years, Caffe Nero has paid more than £80 million in government tax. The furlough money we (and the rest of the country) received during Covid meant we were able to protect our employees’ jobs while the business was struggling. . . caused by the forced closure of our company.’

Earlier this month, it said it had had a “very encouraging first half of the financial year.”