Costa sales rebound amid stormy waters

Middleton Grange Shopping Centre Manager Mark Rycraft outside the new Costa in the centre
Middleton Grange Shopping Centre Manager Mark Rycraft outside the new Costa in the centre
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Premier Inn owner Whitbread has seen sales at Costa Coffee bounce back, but said conditions remain difficult for its hotels and restaurants.

The group cheered a “good start” to its financial year for the coffee chain as it posted a 2.6 per cent rise in like-for-like sales for the 13 weeks to June 2, marking a recovery after sales were hit in the previous quarter.

It said Premier Inn like-for-like sales lifted by 2.1 per cent in a “weaker-than-expected hotel market”, while comparable sales edged 0.2 per cent higher across its restaurant brands Beefeater, Brewers Fayre, Table Table and Taybarns.

Like-for-like sales across the group rose 1.8 per cent, while total sales were 8 per cent higher.

Alison Brittain, chief executive of Whitbread, said: “Costa has started the year well and Premier Inn continues to win share, albeit in a weaker-than-expected hotel market. Although it is early in our new financial year, and despite current market conditions, with the benefit of our cost-efficiency programme we remain confident of making good progress for the full year.”

The Costa performance comes after sales growth slowed sharply to 0.5 per cent at the end of its previous financial year and helped offset a tougher hotels market.

Whitbread revealed a 1.2 per cent drop in Premier Inn’s revenue per available room - a key measure for its hotel arm - as it warned that guest occupancy was 1.5 percentage points lower at 79.1 per cent.

This comes despite a 1.2 per centrise in revenues per available room in the wider hotel market.

It blamed the difficult market conditions and impact of a major expansion programme, which saw it add around 3,600 new rooms in the final quarter of the previous year.

The group wants to open up to another 4,500 new hotel rooms in the current financial year.