Just caught an interesting piece on Whitbread – owner of Costa Coffee, Premier Inn, Brewers Fayre et al. Today they are posting an impressive set of results for the start of the year which sees an overall increase in sales of 14.6% with Costa Coffee up 28.6%. Figures aside. what I found interesting is that Whitbread could potentially be recession proof. Premier Inn the hotel arm of their business offer family rooms all over the UK for a modest £49 and Brewers Fayre (the pub come restaurant strand of the business) do two meals for £9, now quality aside that is good value. Both these doing well seem to show classic signs of people being more careful with their money and as a result going for the budget option, seen in the retail sectors with Aldi and Lidl doing well. The anomaly though is Costa Coffee where a cappuccino and croissant will set you back the best part of a £5 but still sales have increased by almost a third. I think this is partly the result of some shrewd location planning airports, service stations, petrol stations etc and also that as a nation we now see good coffee as another necessity rather than a luxury. It will be interesting to see how long this lasts.
PS. Coffee is the second most traded commodity after oil. They don’t call me phone book Ben for nothing.