Costa Coffee Sales Growth Comes Off The Boil

Sales growth at Costa coffee came off the boil over the winter as the new boss of owner Whitbread (LSE: WTB.L - news) blamed mild winter weather and fewer high street shopping trips.

The chain saw like-for-like sales climb by just 0.5% for the 11 weeks to 11 February compared to a 3% increase in the longer 50-week period to the same date. Whitbread shares fell 6%

Chief executive Alison Brittain, who took over in January, pointed to "lower high street footfall on the high street and an unusually warm winter".

It (Other OTC: ITGL - news) is the latest company to blame the mild weather for tough trading, with a series of fashion retailers such as Next (Other OTC: NXGPF - news) pointing to challenging conditions because demand for warmer items such as coats and knitwear was subdued.

In the trading update from Whitbread, the company's Premier Inn chain fared better, with like-for-like sales up 2.2%, but this was still a growth slowdown.

The hotel brand saw strong growth in its regional market but a weakening performance in London.

Whitbread is pushing ahead with expansion plans with 5,500 new UK Premier Inn rooms due to open this year and 5,000 next year. Costa plans to open 200 net new stores worldwide this year and 230 next year.

It said it was on track to deliver full-year profit in line with expectations (Other OTC: UBGXF - news) .