Trouble brews on high street

Costa hit by slump in shopper numbers

COFFEE chain Costa has blamed shoppers shunning the high street for a record fall in sales.

The firm is feeling the knock-on impact of the growth in people shopping online, rather than in stores.

Sales in the 1,300 UK cafes Costa owns – rather than those run by franchisees – fell 1.5% in the three months to the end of November.

Retailers say a drop in the number of people visiting shops continued in December. Costa is set to close or move 20 to 30 branches this year. Most of the 100 or so to open will be at petrol forecourts, motorway services and in hospitals – rather than on high streets.

Costa’s sales jumped 7.2% once sales from new stores and franchisees are included. Alison Brittain, boss of Costa owner Whitbread, insisted its high street stores remained profitable. “I am fairly optimistic,” she added. “I don’t think coffee drinking is in any danger of going backwards.” Growth in sales at Whitbread’s Premier Inn business slowed to 0.5% in the three months to November 30, but its restaurants arm enjoyed a 1.8% rise. Brittain said Whitbread was on track to hit annual targets after group cost cutting. The update comes amid reports activist investor Sachem Head wants Whitbread to spin off its Costa arm. Brittain said it remained in talks with shareholders and no break-up was on the cards. But ex-ITV boss Adam Crozier may have a say when he becomes chairman next month.