Sales growth slows at Premier and Costa

City A.M. Reporter
BRITAIN’S biggest hotel operator Whitbread said yesterday its sales growth slowed in its third quarter as tough economic conditions kept customers away from its Premier Inn hotels and Costa Coffee shops, which had previously proved resilient.

The group, which also owns the Beefeater and Brewers Fayre pub restaurant chains, said yesterday sales at outlets open more than a year rose 2.4 per cent in the third quarter to 1 December. In the first half, comparable sales had risen by 3.3 per cent.

Sales at Premier Inn hotels open more than a year were up 2.6 per cent in the quarter, compared with growth of 5.2 per cent in the first half. Sales at Costa Coffee shops on the same basis were up 3.8 per cent compared with growth of 6.7 per cent in the first half. However, total sales grew by 11.4 per cent.

“I would say this is a reflection of the general economic climate but [also] I would say that’s pretty impressive growth in total sales,” chief executive Andy Harrison said.

Premier Inn has performed strongly through the economic downturn, benefiting from business customers trading down from four and five star hotels, and a £29-per-room offer wooing leisure customers in off-peak periods.

Costa has also fared well, tempting consumers seeking an affordable luxury during the downturn, and also benefiting from aggressive international expansion.

Whitbread said recent trading month by month had been variable in a challenging consumer environment but Premier Inn had continued to win market share.

Revenue per available room -- a key industry measure -- grew by 9.4 per cent in London, which has been more resilient through the downturn, and two per cent in the provinces. Harrison said Whitbread shared the view of economists that the British economy would be broadly flat next year.

The company said it also remained on course to meet full year expectations.