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Costa Coffee profits up 38% as it pursues international expansion

Coffee chain Costa Coffee saw its underlying profits rise by 38% to £69.7 million in the year to 1 March 2012 as it pursued a store expansion programme in the UK and overseas.

GENERAL MERCHANDISE

Costa Coffee profits up 38% as it pursues international expansion

Like-for-like sales in Costa’s UK stores increased by 5.5% in the year while worldwide system sales rose 24.3% to £819.3 million.

Parent company Whitbread said key drivers of the UK success included the Ice Cold Costa Summer campaign which helped category sales to rise by 44%. Sales also benefited from investment in the store estate which included 128 refurbishments and the rollout of new store designs including four Metro stores. In addition, the chain strengthened its distribution through new channels such as Drive Thru, of which there are now five in the UK with an opportunity for a further 70 locations.

Costa's business in Europe, the Middle East and India continued to grow with a total of 647 stores including 95 in India and 93 in Poland.  In the year a total of 88 new stores were opened in the region. The chain also saw growth in China with 69 new store openings in the year taking the total to 164.    
 
Whitbread said its Costa  Express business had enjoyed a good year with growth ahead of expectations. It increased the  number of cups sold per machine by around 20% following the rebrand to Costa Express from Coffee Nation.  There are now 1,192 Costa Express machines in the UK and there are plans to roll out a further 1,000 machines in 2012/13 supported by a new contract with Shell.

Costa opened a total 332 new stores in the year of which 175 were in the UK and 157 overseas. This took the total number of stores to 2,203. Whitbread  plans to open 350 stores in 2012/13 as it aims to reach growth targets of £1.3 billion system sales, 3,500 stores worldwide and 3,000 Costa Express machines by 2015/16.


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