Whitbread starts solidly as Costa steams back but Premier plods

Group like-for-like (LFL) sales grew 1.8%, up from the 1.7% in the fourth quarter of the previous financial year but well down on the 3.2% rate seen in the whole of the year.

Although Costa's sales were up 2.6%, from the 0.5% in the last quarter, the Premier Inn hotel chain saw LFL sales slow further to 2.1% from the 2.2% rate seen in the fourth quarter.

Chief executive Alison Brittain said the hotel market was "weaker than expected" in the UK, particularly in London.

She said the hotel chain's growth benefited from the continuing of a substantial hotel extension programme.

Compared to a strong first quarter in 2015, Premier Inn's LFL revenue per available room (revpar) declined by 0.5% and total revpar declined by 1.2%.

"This reflects the market environment, the expected dilution of the impact of the extension programme and the circa 3,600 new rooms added in the final quarter of last year, which will mature over the next few years. We are on plan to open 4,000-4,500 new hotel rooms in 2016/17."

LFL sales from the pub restaurant unit were up by a lowly 0.2%, a big fall from the 2.3% rate in the fourth quarter.

Total group sales, boosted by new site openings, were up 8.0%, with Costa's total sales up 11.5%, Premier Inn up 8% and restaurants 1.4%.

UBS analysts had forecast revpar of -1%, Costa LFL growth of 2.5%, and pub restaurants LFL growth of 0%. Deutsche was looking for 1.5% LFLs from Costa and expected weakness for the hotels arm.