This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/business/2016/mar/03/costa-whitbread-mild-weather-high-street-growth-weak

The article has changed 3 times. There is an RSS feed of changes available.

Version 0 Version 1
Mild weather and quiet high street leave Costa growth weak Mild weather and quiet high street leave Costa growth weak
(35 minutes later)
Costa owner Whitbread has joined the ranks of retailers blaming the mild winter weather and lower footfall on the high street for disappointing sales at its coffee shop chain. Costa owner Whitbread has joined the ranks of retailers blaming the mild winter weather and lower footfall on the high street for disappointing sales.
The coffee chain posted like-for-like sales growth of just 0.5% in the 11 weeks to 11 February, down from 2.5% in the previous quarter. Whitbread said this reflected “lower footfall on the high street and an unusually warm winter”. Many high street retailers have blamed the mild weather for not being able to sell winter clothes. The coffee chain posted like-for-like sales growth of 0.5% in the 11 weeks to 11 February, down from 2.5% in the previous quarter. Whitbread said this reflected “lower footfall on the high street and an unusually warm winter”. Many high street retailers have blamed the mild weather for not being able to sell winter clothes.
Whitbread’s budget hotel chain Premier Inn fared better, with like-for-like sales up 2.2%, although this was also slower than the previous quarter, when it grew by 4.7%. The hotel chain continued to win market share. Whitbread’s budget hotel chain Premier Inn fared better, with like-for-like sales up 2.2%, although this was down on the 4.7% in the previous quarter, when it grew by 4.7%. The hotel chain continued to win market share.
Premier Inn has been growing much more strongly outside London. In the capital, occupancy and revenue per room declined – in line with the softer hotel market, Whitbread said.Premier Inn has been growing much more strongly outside London. In the capital, occupancy and revenue per room declined – in line with the softer hotel market, Whitbread said.
Group like-for-like sales were 3.2% ahead, down from 3.6% in the previous quarter. Whitbread expects to meet City forecasts for full-year profits. The company’s share price was down nearly 4% in early trading on Thursday after it issued the trading update. Group like-for-like sales were 3.2% ahead, down from 3.6% in the previous quarter. Whitbread expects to meet City forecasts for full-year profits. The company’s share price was down almost 4% in early trading on Thursday after it issued the trading update.
Under its new chief executive, Alison Brittain, the former boss of Lloyds Banking Group’s retail arm, the company is pushing ahead with plans to open 5,500 new Premier Inn rooms in the UK this year. At Costa, it expects to open 200 net new stores worldwide and install 950 Costa Express machines. It is trialling Costa Collect, a pay-and-collect app to reduce queues and boost sales, along with improved food ranges. Under its new chief executive, Alison Brittain, a former boss of Lloyds Banking Group’s retail arm, the company is pushing ahead with plans to open a further 5,500 new Premier Inn rooms in the UK this year. At Costa, it expects a net increase of 200 stores worldwide and is to install 950 of its self-service machines in non-Costa outlets. It is trialling Costa Collect, a pay-and-collect app to reduce queues and increase sales, along with improved food ranges.
Costa and Premier Inn are two potentially international brands. That is something of a rarityCosta and Premier Inn are two potentially international brands. That is something of a rarity
Analysts at Morgan Stanley reckon that a fresher and healthier range could boost lunch trade where Costa is weak. They believe that Costa can benefit from its heritage and strong brand. The company has also raised some prices to counter the cost of the national living wage, and is considering differential pricing, with an opportunity to price up in London and travel hubs. Analysts at Morgan Stanley reckon that a fresher and healthier range could bolster lunch trade where Costa is weak. They believe that Costa can benefit from its heritage and strong brand. The company has also raised some prices to counter the cost of the national living wage and is considering differential pricing, such as increasing prices in London and travel hubs.
The analysts recently toured a Costa Fresco trial site with management in central London, where a kitchen prepares freshly baked products. At the moment, Costa mainly sells pastries and other sweet treats and centrally produced panini and is missing out on the trend to more freshly made and healthier food. It is up against grab-and-go sandwich chains such as Pret a Manger and Greggs, which are moving into coffee. The analysts recently toured a Costa Fresco trial site with management in central London, where a kitchen prepares freshly baked products. At the moment, Costa mainly sells pastries and other sweet treats, and centrally produced panini. It is up against sandwich chains such as Pret a Manger and Greggs, ther latter of which has been moving into selling coffee.
Greggs, Britain’s biggest bakery chain, has broadened its ranges beyond pasties and sausage rolls and is also selling healthier products such as soup, salad and porridge, as well as improving its coffee.Greggs, Britain’s biggest bakery chain, has broadened its ranges beyond pasties and sausage rolls and is also selling healthier products such as soup, salad and porridge, as well as improving its coffee.
Mark Brumby, analyst at Langton Capital, was reasonably optimistic about Whitbread’s prospects. “In Costa and Premier Inn, the group does have two potentially international brands. That is something of a rarity across much of the leisure space.”Mark Brumby, analyst at Langton Capital, was reasonably optimistic about Whitbread’s prospects. “In Costa and Premier Inn, the group does have two potentially international brands. That is something of a rarity across much of the leisure space.”