Whitbread shares plunged by more than 4 per cent this morning after an “unusually warm winter” meant Costa’s sales slowed.
In the 11 weeks to 11 February, Whitbread revealed like-for-like sales at the coffee chain were up 0.5 per cent. Total sales were up 10.5 per cent.
Like-for-like sales across Whitbread’s hotels and restaurants, which includes Premier Inn, were up 2.2 per cent. Overall, like-for-like sales were up 1.7 per cent while total sales were up 7.7 per cent.
For the 50 weeks to 11 February, Whitbread's total like-for-like sales were up 3.2 per cent and it reported a total sales growth of 10.4 per cent.
Whitbread said Costa had grown its worldwide total sales by 14.2 per cent in the 50 weeks to 11 February.
The company said Costa grew worldwide system sales by 13.1 per cent to £1.5bn. And it said UK retail system sales grew by 14.1 per cent to £833m, with a net 103 new stores opened during the 50 weeks.
Just after midday, Whitbread's shares had dropped by 5 per cent - from 4,049p at close yesterday to 3,845p.
Why it's interesting
Commenting on Costa’s slowing sales, Langton Capital analyst Mark Brumby said: "The numbers are by no means poor but the reality of the situation is that, in addition to the warmer weather derailing short term numbers, the coffee market in the UK must be more mature than it was, even if it is not mature in the absolute sense of the word.
"Furthermore, as we have seen in casual dining, the market leader tends to be there to be shot at and, over time, new entrants may be something of an issue.”
What Whitbread said
Alison Brittain, chief executive:
In the quarter, Premier Inn had a good performance growing total sales by 7.3 per cent with occupancy rising by 0.3 per cent pts to 71.4 per cent and rooms available increasing by 6.9 per cent. Like for like sales grew by 2.2 per cent, which is ahead of our like for like revpar growth at 0.4 per cent, as we benefitted from our substantial, higher returning, hotel extensions programme. Costa had good total sales growth of 10.5 per cent and like for like sales growth of 0.5 per cent reflecting lower footfall on the high street and an unusually warm winter.