LONDON, UK – Whitbread, the owner of Costa Coffee and budget hotel chain Premier Inn, saw UK sales stall for the three months to 30 November, amid tough market conditions and a “particularly challenging October”.
Costa struggled with comparable sales 0.1 percent lower than in the same period in 2016 as people cut back on high street shopping trips. Premier Inn sales were flat in the three month period.
Overall group like-for-like sales were up 0.3 percent on 2016, “reflecting recent tougher market condition”, the firm said in a trading update.
Overall UK like-for-like sales were boosted by the restaurants division, where sales rose 1.8 percent.
Total UK sales, including new openings, were up 5.5 percent in hotels, 3.5 percent in restaurants and 7.2 percent in Costa, leaving total group UK sales up 5.8 percent in Q3.
While the brands struggled to match sales in the same period in 2016, total sales for the quarter stood at 5 percent for Premier Inn and 7.2 percent for Costa.
Self-serve Costa Express machines helped keep total sales ticking over for the firm with total revenue from them up 20 percent in the quarter.
Including international sales, total sales were up 5.6 percent and were up 6.8 per cent in the year to 30 November.
Whitbread said it remains on track to meet full-year expectations on the back of expansion growth and its group-wide efficiency drive.
The Q3 update comes a day after Reuters reported US hedge fund and sometimes activist investor Sachem Head is lobbying Whitbread to hive off the Costa Coffee business from the hotels and restaurants – a move it believes would boost the value of its individual businesses.
Chief executive Alison Brittain didn’t address the Sachem Head story in the Q3 update on Thursday.
