Costa buzzing as fury over rival boosts sales

CONSUMER anger over the tax affairs of its main rival was highlighted as a reason for better-than-expected sales figures from Costa Coffee yesterday.

The UK’s largest coffee chain saw a 7.1 per cent rise in like-for-like sales in the 13 weeks to 29 November, Costa’s parent company Whitbread said yesterday.

Commentators put some of this down to recent criticism of Costa’s US rival, Starbucks, which has faced a public and political outcry over the amount of corporation tax it pays.

“We have been the UK’s favourite coffee shop for some time and we remain the taxman’s favourite coffee shop too,” Whitbread’s chief executive Andy Harrison said, although he said the situation with Starbucks could be one of many factors leading to better sales.

With the 302 new Costa stores opened in the last year, sales rose 25.5 per cent year-on-year, Whitbread said.

The company also saw a 12.6 per cent overall increase in revenues at Premier Inn, the mid-priced hotel chain that continues to be Whitbread’s biggest business by revenues. And the restaurant business, which operates Beefeater and Brewers Fayre, saw overall sales up 4.1 per cent.

Across the group, Whitbread posted a 3.3 per cent rise in like-for-like sales, and a 14.4 per cent increase in overall revenues.

However, growth slowed in Costa’s roughly 200 outlets in China. Whitbread said it would continue to expand in the coming months, opening 330 more Costa coffee shops, creating 4,500 new hotel rooms, and launching eight restaurants.

Shares in the company rose to all-time highs yesterday, before settling slightly and finishing the day almost three per cent up.

Harrison said that Costa had seen a record week last week, taking £10m as public anger over Starbucks came to a head and protests were organised. However, this may also have been down to the extremely cold weather.