Costa chain benefits from corporation tax debate

Whitbread-owned Costa Coffee saw its sales soar 25.5 per cent in the 13 weeks to the end of November as its US rival Starbucks flew into controversy over its failure to pay UK corporation tax.

Perhaps even more impressive was the 7.1 per cent rise in sales from branches and franchises which have been open at least 12 months. That is up from 5.7 per cent in the second quarter.

Chief executive Andy Harrison said: "We cannot disentangle Starbucks from all the things that we are doing ourselves, like a really good TV advertising campaign, improved food range and some really good Christmas offerings." But he admitted: "It certainly hasn't harmed us. What we believe is that people are voting with their taste buds."