Costa Coffee marks lukewarm sales growth

Costa continued to drive parent company Whitbread’s “strong” performance in the third quarter, although the coffee chain saw its sales growth slow as challenging financial circumstances kept customers away from its outlets.

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Sales at Costa oultets open for more than a year were up 3.8% in the third quarter to 1 December, compared with growth of 6.7% in the first half of the year. Costa remains Whitbread’s leading brand in terms of sales and grew revenues by 25.2% in the period.

Whitbread says it plans to open 300 further Costa stores in the next year as part of its growth programme, bringing the total amount of outlets in the UK to more than 2,400.

Earlier this year Costa launched a new self service coffee brand Costa Express, after taking over the Coffee Nation company. Whitbread says there are now 579 Costa Express units and it is proceeding with the rebranding of the remaining 498 Coffee Nation units.

This month Costa, Marketing Week’s Brand of the Year for the Engage Awards, has just restructured its business into four divisions and promoted its marketing director Jim Slater to oversee a new unit responsible for the Costa Express brand and partnerships.

Whitbread’s next biggest brand Premier Inn, grew sales by 2.6% in the quarter, compared with growth of 5.2% in the first half of the year.

The hotel chain increased the total room nights sold in the quarter by 7.4% to 9.6 million and the company says it continues to win share in both London and the provinces.

The Whitbread Group, which also owns brands such as Brewers Fayre and Beefeater, said overall sales rose 2.4% in the quarter, a slow down from sales growth of 3.3% in the first half.

Andy Harrison, chief executive of Whitbread, says: “Our like for like sales performance keeps us on track to deliver full year results in line with expectations.

“As we said at the half year, trading month by month continues to be variable in a challenging consumer environment.”

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