Whitbread’s Costa Coffee has been given a boost by the poor British weather which has been enticing customers into outlets, helping the chain increase first-quarter sales.
The company, which also owns the Premier Inn chain of hotels, said that sales at Costa branches rose by almost one quarter in the 13 weeks to May 30, including 8 per cent like-for-like sales growth.
Andy Harrison, chief executive said: “The weather definitely helped. We could see a clear trend for customers to shelter from the cold spring with a hot cup of Costa.”
Costa has almost 1,600 UK outlets after a net 39 openings in the quarter.
In comparison Whitbread said that its restaurant sales were hit by the weather, increasing only 2.6 per cent and flat on a like-for-like basis in the quarter, as customers stayed away.
This year Whitbread announced plans to double sales at Costa to £2bn with development in the UK and internationally, while it plans to boost the number of rooms at Premier Inn by 45 per cent to 75,000 in 2018.
Premier Inn quarterly sales increased 12.7 per cent after room nights sold increased by almost 11 per cent to 3.7m. Sales were up virtually 20 per cent in London, where Whitbread increased the number of available rooms by about the same amount year-on-year.
Revenues per available room in London fell 1.8 per cent as the group said it faced comparisons with strong demand last year ahead of the Olympics in the capital. However, overall across the UK revenue per room was up 1.7 per cent, in line with its closest competitors.
Approximately 4,000 Premier Inn rooms will be added this year.
Overall, including the company’s restaurants and hotels, Whitbread saw a 3.1 per cent rise in like for like sales which it said was in line with their five-year plans, Mr Harrison added: “We have banked a good start to the year.”
Analysts at Charles Stanley and Deutsche Bank said that the update was slightly better than expected.
“The tough economic environment could actually encourage business and leisure travellers to trade down to the Premier Inn brand,” said Charles Stanley. “Costa remains well positioned to benefit from further development of ‘coffee culture’ in both the UK and overseas.”
Shares increased 3.6 per cent to £30.31.
