Shares in Whitbread, the leisure company behind Costa Coffee and Premier Inn, have fallen nearly 4 per cent in early trading on Thursday after the group posted another disappointing set of quarterly sales figures, particularly at its coffee chain.
Costa, which had experienced runaway growth over the past few years, only managed to eke out a like for like sales improvement of 0.5 per cent in the 11 weeks to February 11, the company’s final quarter. Whitbread blamed this on unusually warm weather this winter while it said footfall on high streets had fallen.
Analysts had been expecting much more robust growth of 3 per cent at Costa in the final quarter. Like for like sales growth at Premier Inn also disappointed in the final quarter, coming in at 2.2 per cent compared to expectations of 3 per cent.
Consumer analysts Mark Brumby at Langton Capital said the coffee market in the UK was maturing. He said in a note this morning:
Slowing Costa sales are likely to grab the headlines.
This should not have been unexpected (given the warm weather, particularly in December) but, whether it was factored into share prices or not will be seen later this morning.
The numbers are by no means poor but the reality of the situation is that, in addition to the warmer weather derailing short term numbers, the coffee market in the UK must be more mature than it was, even if it is not mature in the absolute sense of the word.
Alison Brittain, who took over as chief executive of Whitbread in December last year, has had a difficult start to the new job. She also had to present a disappointing set of third quarter results shortly after taking over the top job from Andy Harrison.