Whitbread confident in coffee demand despite Costa sales slowdown

Shares in Whitbread dropped 3% after a sudden slowdown in growth at Costa in the past 11 weeks sparked fears that growth at the country’s biggest coffee chain may have peaked.

Sales from Costa stores which have been open at least a year grew by 0.5% in the last 11 weeks against growth of 3.7% in the first 40 weeks of the financial year.

But finance director Nicholas Cadbury dismissed talk of a maturing coffee market.

“Some of our stores are so full that it’s difficult to find a seat in them,” he said.

“The coffee market is more competitive but if you include our new openings we still grew at 14% for the year. We still have a long way to go to catch up with our Continental neighbours who drink twice as much coffee as we do.”

Premier Inns also showed slower growth in the latest quarter at 2.2% against 4.9% in the first 40 weeks of the year.

Cadbury said this was the normal trend — particularly in London where both tourism and business trade slows down in the first part of the calendar year.

Chief executive Alison Brittain added that the division had benefited from its “substantial, higher-returning, hotel extensions programme”, and Premier plans to open a record 1000 rooms across the capital this year.

Whitbread shares today fell 120p to 3929p.