Coffee: Caffeine-addicted Brits boost Costa’s sales

22nd June 2011

Andy Harrison, chief executive of Whitbread, the leisure group that owns Costa and Premier Inn hotels told the Guardian that a morning latte or cappucino is no longer a luxury, it's a necessity.

As he points out "popping out" for a coffee is now part of British culture, in a way that few could have been predicted 15 years ago.

He says: "When I was kid everyone wanted a Nescafé – that has definitely changed."

Costa, which opened 73 new coffee shops in the three months to the start of June, now has 1,927 stores worldwide, with plans to double even that to 3,500 by 2016.

The company runs 1,257 stores in the UK – making it bigger than Starbucks and Caffè Nero combined.

The chain is also opening a range of drive-through coffee shops.

Part of Costa's success may have been its ability to absorb an increase in the price of coffee beans. Harrison says rising commodity prices had cost the company an extra £2m in April, but that there were no plans to pass the increase on to the customer.

The Telegraph's Jonathan Silbun notes that Whitbread's first quarter results made its shares the biggest riser in the FTSE 100, closing up 102p at £15.87.

First quarter sales for Whitbread as a whole were up 1.7 per cent on the same three months last year, but Costa Coffee's chain were up 4 per cent, compared to 3 per cent in the previous quarter. Average spend per customer at £3.50 was down, though this was offset by slightly more people visiting the stores.

Whitbread could probably do with the boost, notes the Daily Mail which reports that sales at the company's Pub Restaurants arm – which includes Brewers Fayre, Beefeater and Taybarn – was disappointing, however, with a fall of 1.4 per cent in like-for-like sales compared to a rise of 3 per cent in the previous quarter.

Whitbread (up 7 per cent at 1587p) blamed the extended Royal Wedding bank holiday period for the poor performance. But analysts said this division should have performed better. 

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