Costa on track for 250 more sites as new equipment pushes growth

Costa takeaway cup

Coffee giant Costa remains on track to open between 230 and 250 new stores worldwide after achieving modest sales growth, Whitbread’s Q1 results revealed this morning. But growth within its restaurants was slower at +0.7% like-for-like.

Costa’s sales growth (+1% like-for-like) has partly been attributed to the rolling out of its new breakfast and hot food ranges which were introduced at the end of the last quarter. This has been aided by its deployment of Welbilt’s MerryChef ovens. It has also just successfully introduced colder drinks across its stores including its ‘Cold Brew’, and it aims to push these further over the summer.

Overall, in line with expectations the Whitbread group saw 3% like-for-like sales growth, largely thanks to Premier Inn (+4.7% like-for-like) and Costa. The group’s restaurant brands, Beefeater, Brewers Fayre and Table Table, failed to match the levels of growth posted by the coffee and hotel names.   

The group announced that Costa is on track to meet ambitious growth targets of around £2.5bn sales by 2020. It has already installed 300 Costa Express machines in Q1 and remains on schedule to install 1,250.

“We have had a good start to the year, with first quarter sales growth of 7.6%, in line with our expectations. Our continued drive to grow and innovate in our core UK businesses, focus on our strengths internationally and build capabilities to support long-term growth, combined with our ongoing cost efficiency programme, gives us confidence that we will make further good progress this year,” commented Whitbread’s chief executive Alison Brittain.

“Costa sales grew 8.7% with UK equity like for like growth of 1.1% and a good performance in our expanding travel and drive thru channels.  We are focused on executing on our initiatives, rolling out ‘Cold Brew’ in over 200 of our stores and our latest summer Frostino and cooler drinks have just gone on sale this month. We also successfully introduced our new breakfast range towards the end of the quarter, with further new food ranges launching throughout the year.”

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