Friday 01 July 2022

UK – Costa sales hit by summer heat wave

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LONDON – Strong demand for Premier Inn hotel rooms in London boosted sales for Whitbread in the second quarter while Costa posted slower growth over the summer months as hot weather hit sales.

Overall, Britain’s biggest hotel and coffee shop operator posted 12.4% sales growth in the 24-week period, and a 2.6% rise on a like-for-like basis, helped by strong hotel demand in London.

The group said underlying sales at its Premier Inn hotels grew by 3.0% in the 11 weeks to August 15, with total sales boosted by an increased number of new rooms.

The chain added 1,270 new rooms during the period.

Like-for-like sales at Costa rose by just 3% in the 11 weeks to August 15, compared with an 8% sales rise during the same period last year. Total sales rose 16.5%.

Costa, which opened its 1,000th overseas outlet in Bangkok in August, benefited from global expansion, especially in Asia, where Costa’s sales grew by 53% compared with the same period last year.

Costa opened a net 78 new stores in the UK to give it 1,656 outlets. Costa also opened a net 54 new stores abroad, including 30 in China, and now has 2,659 stores in total.

The coffee chain also benefited from growing demand for premium coffee at motorway service stations adding 553 new Costa Express machines bringing to a total of 3,113 of the self-service units.

Costa said it is on track to open a net 300 new stores this year and 850 new machines.

The chief executive, Andy Harrison, said: “We are on track with our annual plan and our ambitious five-year growth milestones. Combined with our emphasis on returns, this growth should continue to create substantial shareholder value.”

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