Whitbread blames warmer weather for Costa Coffee sales slowdown

Costa Coffee owner Whitbread has blamed warm winter weather for fewer people coming into its shops for a cup of java.

The group said like-for like sales at Costa slowed sharply to 0.5% in the 11 weeks to February 11, "reflecting lower footfall on the high street and an unusually warm winter". Shares fell by more than 2%.

December was the warmest in more than 100 years, according to the Met Office.

Whitbread, which also owns restaurants and the Premier Inn hotel chain, said like-for-like growth at its hotel business grew 2.2% in the period, which was lower than expected in the City.

But chief executive Alison Brittain said the group was on track to report annual profits in line with forecasts and reiterated her plans for expansion.

Ms Brittain, a former head of retail banking at Lloyds Banking Group, insistedWhitbread had had "another good trading period".

For the 50 weeks to February 11, like-for like sales rose 3% at Costa and by 4.4% at Premier Inn.

Numis analysts said: "Whitbread's pre-close trading statement shows a relatively weak trading performance from the key businesses."

Numis expect the business to post a full-year pre-tax profit up 12% to £548.7 million.

Whitbread opened 103 new UK Costa shops in the current financial year, with the chain having been an engine of growth for the group over recent years.

In the coming year it plans to open around 200 Costa shops worldwide and install 950 branded express coffee machines.

The group also plans to open 5,500 new Premier Inn rooms in the UK this year.

Costa currently runs 2,034 UK stores, while Premier Inn operates 62,283 rooms in the UK.

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