Costa helps Whitbread rise above north-south divide

The new chief executive of the leisure group Whitbread, the owner of the Premier Inn and Costa Coffee chains, has warned of a continuing north-south divide in the UK over the next year in the wake of the Government's public sector cuts.

Unveiling buoyant third-quarter sales, Andy Harrison, the former chief executive of Easyjet who took the helm at Whitbread last month, said: "It is definitely true that the London market is strong and it is definitely true that in the regional market life is tougher. I would expect that to continue."

Despite these regional variations, Whitbread delivered total sales up by 13.6 per cent for the 13 weeks to 2 December, higher by 6.8 per cent on a like-for-like basis.

Mr Harrison, who became chiefexecutive of Whitbread after the retirement of Alan Parker, said: "There are not many sizeable, consumer public companies that are delivering these sorts of numbers."

The star performers at Whitbread, which also runs the Beefeater and Brewers Fayre pub restaurants, were Premier and Costa Coffee. Costa grew like-for-like sales by 11 per cent over the 13 weeks – its 35th consecutive quarter of growth. Costa's growth accelerated in its latest quarter, compared with underlying sales up by 9.4 per cent over the 39 weeks to 2 December.

Boosted by the cold weather, Costa has sold nearly 250,000 mince pies – a 75 per cent rise on 2009 – since it began stocking them last month. Accounting for Costa's loyalty card – which has signed up 4.2 million members since March, the chain's underlying sales rose by 8.2 per cent over the 39 weeks.

Whitbread plans to grow Costa, which has 1,791 stores in the UK and overseas, to "at least" 3,000 by the end of 2014/15.

Suggesting little change in Whitbread's strategy, Mr Harrison said: "We have got a good business, a good strategy and we want to make a good company even better and bigger."

Over the third quarter, Whitbread's Premier Inn grew like-for-like sales by 8.7 per cent. At its restaurant division, which also includes Taybarns and Table Table, sales rose by 1.5 per cent.

Snow freezes sales

While its overall performance was strong, Whitbread was one of a string of UK companies yesterday to warn of the impact on its sales of the recent snow. It said it had taken a hit of up to £2m from the weather of the past few weeks.

Others lamenting the cold snap included retailers such as Carpetright, the floor coverings specialist, and Travis Perkins, operator of the Wickes DIY chain, while even Betfair, the online betting exchange, said it had suffered – in its case, takings dipped after several horse racing meetings were cancelled.

The warnings echo recent alerts from the likes of JJB Sports, the troubled retailer, which two weeks ago was the first company to blame the snow for the latest dip in its trading. The weather is also damaging Tesco, Sainsbury's and Marks & Spencer, which have suspended some deliveries in Scotland.