Costa Coffee has reported a fall in sales at its cafes as a result of fewer people visiting UK High Streets.
Like-for-like sales, which strips recently opened stores, fell 0.1%, in the three months to 30 November.
Costa’s owner Whitbread also warned that sales were expected to be “subdued in the near term”.
Like-for-like sales for the whole Whitbread group, which includes the Premier Inn hotel chain, rose by 0.3% compared to the same period last year.
Whitbread blamed weak sales growth at Costa on falling numbers of people visiting UK High Streets.
Like-for-like sales in its 1,357 wholly-owned cafes fell by 1.5% in the quarter.
High Street ‘shunned’
Neil Wilson, senior market analyst at ETX Capital said it was the “same old story at Whitbread as Costa’s slowing like-for-like sales growth in the first half turned into a decline in the third quarter”.
He said the drop in Costa sales seemed to be due to “shoppers shunning the high street, resulting in lower footfall for stores, as well as pressure from the artisan coffee retailers who are gaining market share.”
He said at present it did not appear that Costa’s more profitable coffee products and the newly-launched Cold Brew and Frostino lines were helping to improve sales and margins.
However, Costa’s total sales jumped by 7.2% because cafe’s in airports and railway stations did better.
The company said it was pursuing a “strategy to increase our presence in high footfall and convenient locations such as drive-thru and travel locations and we are particularly pleased with the strong performance of Costa Express”.
Whitbread also owns Premier Inn, which saw like for like sales growth of 0.5%. Total sales rose by 5.5%.