Whitbread Plans Further Expansion for Costa Coffee and Premier Inn Chains

Posted on 3 May, 2013 by Kirsten Kennedy

One of the UK’s leading leisure groups has pledged to create up to 12,000 jobs over the next five years in a huge extension of its most popular brands. The Whitbread Group, which owns both Costa Coffee and the Premier Inn chains, made the announcement after posting hugely successful annual results.

In the year to the 28th February, the group made pre-tax profits of £355.3 million. Correspondingly, total group revenue increased by 14 per cent when compared to the same period a year earlier, netting Whitbread an extremely comfortable £2.03 billion.

Costa Coffee and Premier Inn are two of the biggest names in what has proven to be one of the most profitable industries in the UK economy since the start of 2013. According to GDP figures released last week, the services sector managed to grow by 0.6 per cent during the first quarter – a fact which significantly contributed to the 0.3 per cent overall GDP growth and, most importantly, helped the UK avoid falling into a triple dip recession.

Chief executive of the Whitbread Group, Andy Harrison, had previously expressed a desire to reach certain targets by 2016. These included increasing Costa’s sales by 100 per cent to £1.3 billion and reaching the 65,000 rooms mark at Premier Inn.

However, these targets have now been upgraded following last year’s success. Costa will now be aiming for £2 billion worth of sales by 2018, while Premier Inn is expected to be operating 75,000 rooms in the same timeframe.

According to Mr Harrison, the group is “well on track” to achieving these goals, especially after the release of these latest successful results.

He says; “This is another set of excellent Whitbread results, delivering double digit growth in sales, profit and dividend.

“Over the last five years, throughout the worst of the economic downturn, Whitbread has grown its sales by 11 per cent per annum and profits by 12 per cent per annum, together with 12 per cent per annum growth in dividends.”

It is certainly true that the Whitbread Group, which also owns the Beefeater and Brewers Fayre restaurants, has been one of the rare success stories of Britain’s economic difficulties. This is partly due to ownership of a large number of successful brands and partly through adapting to the financial capabilities of consumers.

The Premier Inn chain, where like for like sales grew by 3.1 per cent last year when the impact of new space is subtracted, became hugely popular with consumers thanks to the affordability of rooms. Last year it opened 4,242 rooms, bringing the total number of hotel rooms in the UK under the Premier Inn brand to 51,671.

Meanwhile Costa Coffee, which experienced a like for like sales growth of 6.8 per cent, used combination deals and played on the public’s desire for takeaway coffee in order to remain a strong competitor in the hot beverages sector.

Do you think the success of the Whitbread Group is due to clever management decisions or because of the strong brands it owns?




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