Whitbread sees sales race ahead as group feels a positive Olympic effect

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The owner of Premier Inn and coffee chain Costa unveiled further growth yesterday as its businesses received an Olympic boost.

Whitbread, which also owns Beefeater and Brewers Fayre restaurants, reported total sales growth of 14.8 per cent in the 11 weeks to August 16, an increase of 4.2 per cent when the impact of new site openings is stripped out.

The group estimated that the Olympics added around one percentage point to total revenue per available room (revpar), a key industry measure.

Within the figures, Premier Inn, which has more than 50,000 rooms, saw total room nights sold increase 10.2 per cent to 6.4 million, while Costa, which has more than 2,300 stores worldwide, saw total system sales surge 23 per cent to £432m.

Simon French, analyst at Panmure Gordon, said the second quarter update was ahead of the broker’s expectations although each division “benefited from ‘one-offs’ that boosted revenue growth”.

Mr French also added that the recent company voluntary arrangement (CVA) approved by Travelodge creditors will turn the chain into a stronger competitor to Premier Inn.

Premier saw total revpar growth of 1.9 per cent, compared to a revpar decline of 4.3 per cent in the wider mid-scale and economy hotel markets.

The group has opened 1,565 net rooms in the year to date and for the full year it plans to open around 4,500 rooms and eight joint site restaurants.

Costa had a strong quarter with like-for-like sales up 5.7 per cent, as the group continued to grow in both the UK and overseas markets. In the UK alone, retail system sales grew by 20 per cent to £234.3m with wholly-owned stores delivering like-for-like sales of 7.1 per cent, benefiting from the relatively poor weather in the second quarter.

The group opened 50 net new UK stores in the period – 39 in UK retail and 11 in Costa Enterprises.

The restaurants division also continued to improve, with a like-for-like sales increase of 4.9 per cent.