Costa angers customers by sneakily hiking prices as it pockets VAT relief
COFFEE chain Costa has quietly hiked prices and stopped passing on Rishi Sunak’s VAT cut to customers.
Last year, the Chancellor cut the Value Added Tax rate on food and drinks from cafes and restaurants to 5% from 20%.
Businesses are not obliged to pass on the cut although many chains, including Costa Coffee, immediately pledged that they would.
The hike means a large Americano now costs £3 up from £2.63 and a bacon bap now costs £2.95 up from £2.58.
Last week, Costa announced a 50% off sale on food for Monday’s, Tuesday’s and Wednesday’s in January, to replace the offer.
But dozens of customers have complained on social media about the price increase.
One customer said: “Hi, noticed your prices seem to have gone up yet VAT rate cut remains in place until 31 March this year.
“Can I ask if you have raised prices? Large americano was £2.54 and now £2.90 – eye watering 14% increase.”
COSTA PRICE RISE
HERE’S how the price hike will affect prices. It’s important to note that prices can vary between branches.
Large americano – was £2.63, now £3
House filter coffee – was 88p, now £1
Latte – was £2.23, now £2.55
Flat white – was £2.36, now £2.70
Ham and cheese toastie – was £2.58, now £2.95
Bacon bap – was £2.58, now £2.95
Salted caramel brownie – was £1.97, now £2.25
Another said: “@Costacofee have your prices gone up? £3.65 for a large chai latte!!! Come on guys.”
A spokesperson from Costa said: “We can confirm we’re no longer passing on the 15% VAT, instead we are looking at new ways to reinvest and provide customers with new offers and promotions.
“We’ll be announcing other campaigns and promotions throughout the year.”
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In September last year, the tax relief was extended from January 13 until March 13 2021 by Mr Sunak.
All Costa-owned outlets passed on the VAT cut last year, although stores operating on a franchise basis were not obliged to implement the cut and many did not do so.
Costa, owned by American soft drink giant Coca-Cola since 2018, said last year that hundreds of jobs were being put at risk by the pandemic.