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Costa plans coffee shop expansion
FoodBev Media

FoodBev Media

15 October 2008

Costa plans coffee shop expansion

The interim results of Whitbread Plc, the restaurant and hotel group, included the announcement of plans to continue the expansion of Costa, a UK coffee chain. While the group has 1,121 outlets in the UK and overseas, a recent survey has identified more than 400 UK locations where Costa is not yet represented. Stores are opening in hospitals, cinemas, garden centres, supermarkets and council leisure facilities. By the end of the year, Costa plans to have the largest coffee shop presence on UK motorway service areas, with about 50 stores. Overall, Costa is set to open approximately 200 stores in the UK this financial year. Overseas, 72 stores were opened in the first half. These included 11 new, joint venture stores and 61 new, international franchise stores, bringing the total number of overseas stores to 346 in 22 countries. * Costa results* Total revenues for Costa are up by 25.6% at £123.2m (€158m) on last year and total profit up 10.6% at £7.3m (€9.3m). Costa reported like for like sales growth for the first half of 3.7%. Although June and July had strong comparatives, sales in August increased by 4.5% year on year. Costa has seen substantial cost increases in raw materials such as coffee, milk and wheat. However, in anticipation of this, management took action at the start of the year, taking steps to improve operational efficiencies, and a small price increase was introduced in January 2008. Costa's international business posted a first-half loss of £1.2m (€1.5m), similar to last year. *Green coffee * Costa has announced its intention to convert its entire coffee supply to sustainably grown coffee beans sourced from Rainforest Alliance Certified farms. With immediate effect, at least 30% of the beans of Costa's Mocha Italia blend will come from certified sources, equal to about 1,200 tons of green coffee over the course of a year.

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