Costa saw underlying profits surge 38% to £69.7m in the past year and benefited from a 5.5% rise in like-for-like sales at its UK equity stores as it opened 332 new stores in the UK and internationally.
In its annual results for the year to 1 March 2012, parent company Whitbread said Costa’s worldwide system sales increased 24.3% to £819.3 million. Costa’s UK business was boosted by the Ice Cold Costa Summer campaign last year, which saw category sales rise by 44%, further investment in the estate with some 128 refurbishments and the roll out of new store designs including four Metro venues. Distribution was also strengthened through new channels such as Drive Thru, of which there are now five across the country, with an opportunity for a further 70 locations.
Costa’s business in Europe, the Middle East and India grew to a total of 647 stores including 95 in India and 93 in Poland with 88 net new stores opened. Costa Asia saw strong growth in China with 69 net stores opened in 2011/12 taking the total to 164, with plans to open a further 100 stores in the year ahead. In total, Costa opened 332 net new stores over the year: 175 in the UK and 157 overseas taking its total number of stores to 2,203.
The company’s self-service Costa Express business in the UK also had a good year, building on the takeover of Coffee Nation last year. “Typically, the number of cups sold per machine increases by around 20% once it is rebranded to Costa Express from Coffee Nation,” said the company in a statement. “There are now 1,192 Costa Express machines in the UK, which includes 622 conversions. We plan to roll out more than 1,000 Costa Express machines in 2012/13 supported by a new contract with Shell for more than 500 machines.”
Whitbread said it planned to open 350 Costa stores in 2012/13 putting it on track to achieve its growth targets of £1.3 billion system sales, 3,500 stores worldwide and around 3,000 Costa Express machines by 2015/16.
Costa was split into four new divisions early in 2012 to reflect the increasing breadth and globalisation of the brand and to support its growth strategy for the future. The new divisions are: Costa UK Retail; Costa Enterprises (which includes wholesale, corporate franchise and Costa Express); Costa EMEI (which covers operations in Europe, Middle East and India); and Costa Asia.
Overall, Whitbread saw sales grow by 11.2% with an increase in underlying pre-tax profits of 11.3%.