19 January 2018

Costa shows strong global growth – but UK like-for-likes fall flat

Whitbread warns of “subdued” consumer demand on UK high streets, but global sales and automated machines remain healthy

The owner of the UK’s largest coffee chain announced this week that total international sales grew 6.9% in the 13 weeks to 30 November, 2017.

Whitbread said there had been “good momentum” for Costa Coffee in China and hailed underlying sales growth of 6.7% for its UK-based ‘Express’ machines.

The multinational did however issue caution on Costa’s like-for-likes on the UK high street, which fell 1.5% during the same period. Whitbread cited lower footfall as the main reason for the decline in sales –  overall 0.1% lower than for the same period in 2016.

Acknowledging tough trading conditions on the high street, Whitbread CEO, Alison Britain, praised the strength of the Costa brand globally, saying that UK stores were “highly profitable and generate strong returns."

“The well-publicised weak retail market footfall is negatively impacting our high street stores' like-for-like performance and we expect this to continue for some time. Internationally, Costa in China continues its good momentum with another quarter of positive like-for-like sales growth,” she said.

Costa, which took an estimated annual revenue of £978.3m from its 2,326 stores in the UK, was this month voted the ‘Nation’s Favourite’ by an independent poll in Allegra’s Project Café2018 UK report.

However, the brand faces stiff competition from high street rivals embracing the growing trend for artisanal coffee delivered at scale.
 
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