As the economic recovery intensifies going in to summer, many within the retail, leisure and hospitality sectors are experiencing the benefits of an upturn in consumer confidence first hand. One of the frontrunners in the recovery is the hotel and restaurant group Whitbread PLC, which has this week revealed subsidiary brands Costa and Premier Inn have once more proven to be the driving force behind rising profits in its latest set of results.
In the 13 weeks to the 29th of May, total sales rose by 12.7 per cent, or 6.9 per cent on a like for like basis, with Costa contributing a 15.9 per cent total sales growth thanks to its extensive store opening programme. Premier Inn, meanwhile, posted a 14.2 per cent rise in total sales for the period, once again being narrowly beaten by the popular coffee chain.
Yet on a like for like basis, Premier Inn came out on top with a rise of 9.5 per cent, compared to Costa’s 4.5 per cent increase. As like for like sales exclude the impact of new store openings, this tends to be a better means of judging performance and indicates how strongly Premier Inn is managing to build its customer base.
Chief executive of Whitbread, Andy Harrison, revealed that both brands had managed to up their market share exponentially.
He continued; “Premier Inn and Costa have continued on their rapid growth trajectory, underpinned by strong customer demand.
“We currently have 43 new Premier Inn hotels under construction in the UK and expect to open around 4,500 new rooms this year, with five joint side restaurants. Costa will open around 300 net new stores this year.”
Premier Inn’s goal is to reach a total of 75,000 rooms by 2018, with the growth of the coming half to contribute hugely towards this target. At present, it has over 670 UK hotels containing a total of 55,000 rooms.
In the first quarter, Costa opened 36 new UK stores, which are expected to contribute well to its 2018 milestone of £2 billion in sales. The last fiscal year saw it reach an impressive £1.2 billion, with a 19.4 per cent increase in total sales.
Whitbread also owns a series of pub restaurants, with the most prominent being Brewers Fayre, but due to consumers still remaining wary of spending Costa and Premier Inn remain the group’s largest sources of annual income. And with both brands continuing to channel increasing amounts of investment into expanding their commercial property portfolios, it seems that this may be the case for several years to come.
Previous Post
Government rejects call to scrap Business Rates
