Mixed Q3 results for Whitbread as like-for-likes drop at Costa

Whitbread CEO Alison Brittain
18/01/2018 - 09:07
Like-for-like sales at Costa Coffee UK dropped by 0.1% in the 13 weeks to 30 December as weak retail footfall hurt performance.

Though total revenues in the UK grew by 7.9% thanks to new openings, the firm expects same-store sales to continue to suffer for “some time”, according to Alison Brittain, chief executive of Costa owner, Whitbread.

The drop was a hit to Costa’s year-to-date Lfl sales but these remain 1% up on 2016’s numbers. Year-to-date total sales across the UK are up 7.9%.

Total sales for the coffee chain when international revenues are included, were up 6.9% in the quarter and are up 8.3% for the year.

Brittain added: “Costa UK has delivered strong total sales growth of 7.2% in the quarter, as we pursue our strategy to increase our presence in high footfall and convenient locations such as drive-thru and travel locations and we are particularly pleased with the strong performance of Costa Express. 

“As a result of our channel strategy, more customers are drinking more cups of our coffee than ever before and we have gained market share.”

Total UK and international sales growth moderated in the third quarter due to the closure of the equity-owned business in France, together with the closure of underperforming stores in China.

Revenues are up 5.3% in the year-to-date at Costa China, where the company now has 425 stores- one of 31 different countries where Costa now operates.

Whitbread’s restaurant portfolio, which includes the Beefeater and Brewers Fayre chains, grew like-for-like sales by 1.8%, lifting year-to-date sales up to 1.3%.

Total restaurant sales were up 3.5% in Q3, again providing a lift for the group’s year-to-date sales which now stand at + 2.7%.

Third quarter like-for-like sales at the company’s Premier Inn hotel brand broke even with the same period in 2016 but total sales jumped 5.5% through new openings and expansions.

Overall sales across Whitbread’s operations are up 6.8% on 2016, which Brittain says is indication that the group "is on track to achieve expectations for the full year".

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