Costa losing out to expensive imports and artisan competitors

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The coffee giant’s pre-tax profits dropped around 10% to £59 million.

Whitbread, Costa’s owner, saw group profits rise by 20% to £316 million thanks to its Premier Inn hotel business and a sales growth of 7% to £1.7 billion.

Coffee imports have become more expensive as the product is priced in dollars. This is also due to the fall in the value of sterling.

In the six months to 31 August, Costa’s revenues increased by 8% but this was largely down to the introduction of 108 new stores.

The Premier Inn Hotel saw profits rise by 27% to £295 million due to the addition of 2,000 rooms. It’s also looking to add eight new hotels in Germany.

Costa hopes that the “third wave of coffee” will help boost sales. With more artisan coffee producers reeling in young consumer, the British coffee giant will look into producing a more sophisticated and high-calibre quality of coffee.

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