Premier Inn owner Whitbread (WTB) has more than doubled like-for-like sales at the hotel chain in the 13 weeks to 1 June 2017.
Sales rose an impressive 4.7%, up from 2.1% over the same period last year, helping to push Whitbread’s shares 3.7% higher to £39.98.
Unfortunately, the group’s high street coffee chain Costa Coffee is finding life a bit hard. Its sales growth has more than halved from 2.6% in the 13 week period a year ago to now only advance 1.1% in the comparative period.
However, that is still slightly better than expected. The consensus forecast from analysts was only 1% like-for-like sales growth, according to Deutsche Bank research analyst Geoffrey d-Halluin.
He adds: ‘Whitbread has benefited from good trends in the expanding travel/drive thru channels and successfully introduced the new breakfast range towards the end of the quarter.’
In April, we warned that inflation was hitting discretionary spending, resulting in people cutting down on their daily caffeine boost among other items.
Langton Capital analyst Mark Brumby says Premier Inn’s bounce is ‘impressive’ but the continued slowdown at Costa is a concern.
‘It will not be performing strongly in the current hot weather and retail footfall is on the slide,’ comments Brumby.
He says the shares are traded on a lower rating than historically, reflecting concerns that the UK economy is about to slow.
