<div id="readability-page-1"><div><div><p>Coffee drinkers should get used to high prices, the boss of Caffe Nero has said.</p><p>Gerry Ford, the American founder and managing director of Caffe Nero, said prices were unlikely to fall in the foreseeable future – even if bean costs finally begin to drop after two years of unprecedented rises.</p><p>Mr Ford said: “You typically don’t have [price] cuts. What you have is you don’t have the same inflation, so instead of thinking ‘I’ll put up my prices now six months after the last one’, it might instead be 18 months.”</p><p>Customers are “more likely to have less inflation coming in over a 12-month period than people start cutting prices,” he added.</p><p>“By and large, if costs come down, then [coffee shops] just won’t increase the prices for a longer length of time.”</p><p>The price of Arabica beans is hovering at around $4 (£3) a pound, more than double what it was in September 2023.</p><p>Mr Ford said commodity prices were “exorbitant right now,” but that a cup of coffee was unlikely to get cheaper as the price involved more than just the cost of beans.</p><p>“Let’s say commodity prices in coffee go down, but milk prices go up. It might just mean that you’re not going to put up prices as rapidly because of the commodity prices,” the Caffe Nero boss said.</p></div></div><div><div><p>The comments are a blow for coffee drinkers, who have seen the price of their daily brew rapidly spiral higher in recent years.</p><p>Figures from Lumina Intelligence show average prices have jumped by 80p since 2022 to £4.02.</p><p>The price of a latte in coffee, sandwich and bakery chains has risen by 21pc over the same period, the data suggest.</p></div></div><div><div><p>The price of a regular cappuccino at Caffe Nero’s most expensive chains – located in London train stations – has risen from £3.70 to £4 since September last year.</p><p>Prices are cheaper outside London and in stores that are not located in train stations.</p><p>Donald Trump’s tariff war has been blamed for forcing prices higher after he slapped tariffs on major coffee-exporting countries including Vietnam.</p><p>Mr Ford said “the tariffs and trade wars in general between countries” had led to “a lot of uncertainty on our inbound costs”.</p><p>“I’m sympathetic as a consumer walking in and paying more. I get it, it feels like, ‘Gosh, costs have gone up a lot,’” he said. “But because the commodity price is so high, I am sympathetic to people who are selling coffee because they’re paying a lot more than they would have in years gone by.”</p><p>Mr Ford also pointed out that his coffee shops were also not the most expensive on the high street. Regular drinks at Caffe Nero tend to be priced below large rivals, with lattes 10p cheaper than at Costa and 85p less than at Starbucks.</p><p>Sizes do vary across coffee shops, while cafes set different prices based on where the store is located.</p></div></div><div><div><p>Analysts have warned that £5 coffees may be the limit for people, with consumers choosing not to buy the drinks if prices tip over this level.</p><p>Mr Ford is conscious of this and said: “Other people tend to push up the prices beyond where we are, so we can see how the consumers react before we ever get there.”</p><p>However, he said people have been more tolerant of high prices than he had expected, adding: “If you’d asked me this question 28 years ago, it would have had a different lid than now.”</p><p>Sales remain strong. Mr Ford said sales across Caffe Nero rose 9pc in the six months to the end of November. In the UK – its largest market – sales rose 7pc on last year to hit a record high of £194m.</p><p>Rising sales are in sharp contrast to rivals. Coca-Cola, the owner of Costa, recently put the business up for sale after warning that the company was “not where we wanted it to be”.</p><p>Poor performance at Costa drove a 3pc decrease in coffee sales at Coca-Cola in 2024.</p><p>Meanwhile, Starbucks revealed sales slipped 4pc in its UK business last year to £525.6m. It said in September that it was planning to close some UK sites.</p><p>Mr Ford said both were businesses run by “big corporate entities”, which meant they “feel like they’re detached from the consumer and less local”.</p><p>“The thing that they’ve lost, and I think the thing we have, is we’re still local.”</p><p>Mr Ford, who founded Caffe Nero in 1997, remains its largest shareholder, having orchestrated a £225m take-private deal almost two decades ago. In recent years, he has rejected takeover approaches from the likes of the billionaire Issa brothers.</p><p>Caffe Nero “feels like a family-run company rather than a big corporate environment”, Mr Ford said, adding: “We’ve got some 1,100 stores, but it’s still my company and it’s still run the same way. It’s an independent that has just grown.”</p><p>Even as high prices put pressure on rivals, Mr Ford believes there is room for expansion.</p><p>“There’s a massive amount of opportunity here in the UK. We could open a lot of stores in one year. Typically we have a target of about 30 to 40 in the UK. I don’t see that stopping in the next five years at all. We’re not likely to stumble over our own feet.”</p></div></div></div>

SBUX

<p>Caffe Nero's boss, Gerry Ford, warns coffee prices will remain high despite potential drops in bean costs. Factors like milk prices and tariffs contribute to sustained high prices. Coffee prices have risen significantly, with Caffe Nero's sales increasing despite competitors like Costa and Starbucks facing challenges. Ford emphasizes Caffe Nero's local approach compared to larger rivals. The company remains independent, with Ford rejecting takeover offers.</p>

Get used to pricey coffee, Caffe Nero boss warns