Mon. May 25th, 2020

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Costa blames high street decline for 2% sales drop


Britain’s biggest coffee shop chain Costa has blamed a drop in sales on the woes affecting the British high street.

Owner Whitbread said like-for-like sales fell by 2% in the first quarter, “principally from footfall weakness in traditional shopping locations”.

However, total UK sales growth was up by 5.2% thanks to new branch openings as well as self serve coffee machines which are mainly in petrol stations and convenience stores.
Chief executive Alison Brittain said: “Our stores remain highly profitable and deliver an excellent return on capital.”
Whitbread also said it remained committed to its plans announced in April to spin-off its Costa coffee empire from its Premier Inn hotel business and other interests as quickly as possible “to optimise value for shareholders”.

The company said: “Constructive early steps have been taken in preparation for the demerger and good progress continues to be made on the core infrastructure and efficiency work that was already underway.
“A further update on the demerger will be provided alongside the interim results in October 2018.”

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Ms Brittain sounded a more cautious, but optimistic note on the company’s outlook – particularly in the UK where retailers and the wider consumer-focused sector has endured tougher times because of a Brexit-linked squeeze on household finances.
She said: “Both the budget hotel market and the coffee market present long-term structural growth opportunities, and whilst we are cautious of shorter-term trading conditions in the UK, due to well-publicised consumer trends, we are confident that we have the right strategies in place to enhance our UK and international market positions and ensure each business is well-positioned to thrive as a separate entity.”

Source: Sky

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