The high street coffee chain has warned it needs to cut costs amid continued uncertainty as to when trade will recover. It told staff on Thursday that it has started consultations which could impact more than a 10th of roles.
Despite the Government urging as many people as possible to get back to work, footfall in city centres remains significantly lower than before COVID-19.
The move comes a week after rival Pret A Manger revealed it was slashing 2,800 roles as part of a restructure of its UK business.
Costa closed nearly all of its 2,700 UK stores for six weeks during the pandemic but had now reopened around 2,400 sites.
The Coca Cola-owned chain said trade is “returning” after being boosted by the Government’s VAT reduction on food and non-alcoholic drinks and the recent Eat Out to Help Out scheme.
However, it said the proposed job cuts had been driven by “high levels of uncertainty as to when trade will recover to pre-Covid levels”.
Neil Lake, managing director for Costa Coffee UK and Ireland, said it was “an extremely difficult” decision to make.
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“As a proud member of the UK high street, we remain committed to the role Costa plays in supporting the economic recovery of the country, but today I want to say a huge thank you to all of our team members that are affected by this announcement and we will be supporting you throughout this process.”
Costa is just the latest victim in a long line of high street chains hit by the COVID-19 pandemic.
A survey by Deliveroo of small and independent restaurants, conducted soon after lockdown restrictions were introduced, showed 52 percent believed they would be forced to permanently close within the next three months if the current situation continued.
Deliveroo’s research showed 75 percent of partners were concerned about making a profit while necessary social distancing requirements remain in place, because they will have to operate at reduced capacity.
Kate Nicholls, chief executive of the trade association UKHospitality, said at the time: “Restaurants have been hit hard by the COVID-19 crisis. Household name brands on every high street have been closed and many will be operating at well below capacity once lockdown ends.
“These businesses provide employment and are great social hubs in every region.
“As these proposals from Deliveroo and their partner restaurants show, restaurants need urgent support from the Government so that they can help rebuild economies and give people some much-needed enjoyment.
“Without it, some will close permanently and people’s jobs will be lost.”
More to follow…