Whitbread to double Costa coffee chain

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The Independent Online

Whitbread yesterday admitted it had Starbucks in its sights as it doubled its expansion plans for its Costa chain of coffee shops.

The leisure giant, which has 650 Costas in 15 countries, is aiming to open 2,000 by 2010. This will involve almost doubling the size of its UK estate to 800 stores and finding new markets to open up in overseas. It is in talks to enter the Czech Republic, Slovakia and Turkey and recently announced plans to take the brand to Bulgaria, Poland and Romania. It already has 147 stores outside the UK, including a joint venture in China.

Costa believes that if Starbucks, the US Goliath of the coffee shop world, can still open stores in its home market, where it has 27 stores per 1 million Americans, then it still has plenty of scope to grow. In the UK, Starbucks and Costa have eight stores per 1 million Britons.

The coffee store market is booming in the UK after several years of turmoil as chains struggled to sell enough cappuccinos to cover expensive rent bills, particularly in London.

Costa was founded in 1971 by two Italian brothers and bought by Whitbread in 1995. Last year it made underlying profits of £13.5m on £146m of sales.

Whitbread, which owns the Premier Travel Inns hotel chain, is looking to sell its TGI Friday bars division.