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Costa like-for-like sales growth slows due to hot summer

Costa Coffee saw its sales growth slow in its second quarter as soaring summer temperatures led to a fall in demand for hot drinks.

GENERAL MERCHANDISE

Costa like-for-like sales growth slows due to hot summer

Costa Coffee saw its sales growth slow in its second quarter as soaring summer temperatures led to a fall in demand for hot drinks.

In the 11 weeks to 15 August 2013, the Whitbread-owned coffee chain increased its like-for-like sales by 3% compared to growth of 8% in the first quarter. Total sales increased by 16.5%.

During the half year, Costa grew its total sales by 20.8%. While total system sales rose by 19.7% to £521.9 million, total franchise system sales climbed 18% to £207.3 million.

In the UK, retail system sales increased by 17.3% to £279.5 million as equity stores delivered like-for-like sales growth of 5.7%. Whitbread said the performance was biased towards the first quarter due to the colder weather in the first quarter and warmer weather in the second quarter.

Costa Enterprises (including Costa Express) achieved system sales of £126.8 million, up 24.5% as the chain added 553 net new machines in the 24 week period taking the total number of Costa Express machines to 3,113. 

In the year to date, Whitbread opened 78 net new UK Costa stores, including 70 in UK Retail and 8 in Costa Enterprises, and plans to launch around 300 net new stores and 850 Costa Express units in the full year.

International system sales grew by 20.7% to £115.6 million, with growth of 12.2% in EMEI and 53.2% in Costa Asia, with mid-single digit like-for-like sales growth in China. 

Across the group, Whitbread saw its total sales rise by 10.8% for the second quarter with like-for-like sales growth of 2.1%. In the half year, total sales increased by 12.4% while like-for-like sales rose by 2.6%.

Commenting on the six month performance, Whitbread chief executive Andy Harrison said: “Whitbread delivered another good performance... Costa, the UK's favourite coffee shop, has continued to grow rapidly with total sales up 20.8%. The strong UK like-for-like sales growth of 5.7% was biased towards the first quarter due to weather comparatives. Costa also celebrated the opening, in Bangkok, of its 1,000th international coffee shop in August.

“We are on track with our annual plan and our ambitious five year growth milestones. Combined with our emphasis on returns, this growth should continue to create substantial shareholder value."

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