Costa must “step up” its international rate of growth to achieve its overseas targets, according to Andy Harrison, chief executive of Whitbread speaking after the group posted its Q4 results
Harrison said the “vast bulk” of the planned 800 Costa Express installations planned for this year will be in the UK but has planned overseas installations in in Ireland, the UAE and central Europe including France and Denmark.
The group said Costa Express has received really good response from overseas consumers but Whitbread has not yet landed a large contract in overseas territories as it has in the UK to enable roll-out.
He added that internationally the group needs to “step up” its rate of growth to achieve its targets, citing China as a territory it particularly needs to increase its rate of growth in, while in France it is planning to open c.12 stores in the next year to add to the half dozen stores that are currently operating in France.
Meanwhile it is understood the company will roll-out its deli/cafe bar concept Proven Dough to further Hub by Premier Inn sites after trialling it at its Covent Garden Hub.
The Hub by Premier Inn is an important part of Premier Inn’s future hotel growth strategy and is expected to contribute 3,000 rooms to Premier Inn’s planned total of 75,000 by 2018.
Wyn Ellis at Numis said of the initiative: “Initial trading at the St. Martin’s Lane “Hub” has been encouraging and we believe that Whitbread may have hit upon another winning formula.”
Whitbread has reported like-for-like sales at Costa up 6% in the 50 weeks to 12 February and 6.9% in the fourth quarter.
Its restaurants division like-for-likes was up 2.2% for the year to date and 0.6% for Q4. The company said like-for-like covers for the quarter were down 0.4%.
Costa grew total system sales in the 50 weeks by 16.2% to £1,340.5m, (17.5% at constant currency). Within this, franchise sales were up 15.5% to £516.9m (17.9% at constant currency). UK retail system sales were up 17.2% to £730.3m, with equity stores delivering like-for-like sales growth of 6% powered by like for like store transaction growth of 4.6%. Costa Enterprises (including Costa Express) grew system sales to £331.9m, up 19.4%.
International system sales at Costa grew by 10.9% to £281.2m (16.4% at constant currency), with growth of 6.5% (13.0% at constant currency) in EMEI and 20.3% (23.5% at constant currency) in Costa Asia.
The company said this year Costa would open around 230 net new stores, including c.180 in the UK and c.50 internationally,
