A new product innovation team created by Costa to drive menu evolution has already come good, with the group’s first major project driving a solid uptake in breakfast sales.
The team was behind a new range of breakfast food that was launched in the first quarter of the year and it has fuelled a 9% like-for-like increase in breakfast food volume in the period since it was rolled out.
Costa bosses also described feedback on the range from customers as “strong”.
Further work is now underway to supplement the breakfast offering. The innovation team has also developed a new range of salads that was launched over the summer and new hot food in September. They have also created a strong pipeline of new hot and cold drinks to launch in the year ahead.
“Initial performance has been encouraging,” said Costa’s parent company Whitbread today. “In addition to the introduction of the new food range, Costa launched new cold drinks in advance of the summer, including cold brew coffee, frostino iced drinks and a trial of nitro coffee.”
Costa has undertaken a significant amount of strategic activity over the past 18 months. This has included reshaping its store network plans towards “growth channels”, creating a strong pipeline of coffee and food product innovation and rolling out new digital initiatives.
Costa’s store estate now spans 2,326 units in the UK following the opening of 230 new equity and franchised stores in the first half of the year. 32 stores closed in the six months to 31 August 2017.
In the year ahead, approximately two-thirds of new stores will be in drive-thru stores, transport locations and retail parks, where the company sees the greatest store potential.
The growth of Costa Express also continued with 1,365 new machines in the last 12 months in the UK, adding 25% to its capacity.
All Costa Express machines are connected through in-house developed telemetry, which ensures low maintenance for partners and greater consistency of availability, according to the company. During the period a new partnership was agreed with Morrisons supermarkets.
Costa’s UK business generated sales of £542m during the first half of the year, up 8% on the same period last year. Underlying operating profit fell 5% to £61m.