By Matt West
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Whitbread said today that it would step up expansion of its Premier Inn and Costa Coffee chains creating 12,000 jobs nationwide over the next five years.
Whitbread has already created 3,000 UK jobs in the last year and announced new targets today which will see it grow Premier Inn by 45 per cent, to around 75,000 rooms, and double coffee chain Costa’s sales to around £2billion.
The announcement comes a week after supermarket chain Asda said it planned to add a further 2,500 jobs across the UK this year alone as part of a £700million investment.
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The pledge from the leisure chain, which also owns Beefeater and Brewers Fayre restaurants, came as it reported an 11 per cent rise in underlying profits to £356.5million for the year to February 28. .
Whitbread has 40,000 staff serving 22million customers every month at more than 2,500 UK outlets.
In the last year, it sold 14million Premier Inn rooms, 46million restaurant meals and 320million cups of Costa coffee.
The continued strong demand ensured revenues rose by 14.2 per cent to £2billion, with the sales figure up by 3.7 per cent when recent expansion is stripped out.
Chief executive Andy Harrison described today’s results as ‘excellent’ and said that during the economic downturn of the last five years the company has grown its sales by 11 per cent a year and profits by 12 per cent a year.
His latest targets for the group are on top of the five-year milestones set two years ago for the group to grow Premier Inn to 65,000 rooms and for Costa sales of £1.3billion.
Premier Inn opened 4,242 rooms during 2012/13, taking the total to 51,671, and Whitbread said it expects half the additional 23,000 rooms planned by 2018 will be achieved by expanding into new catchment areas.
The hotels business increased revenues by 13.1 per cent to £853.8million in the year, with the figure ahead by 3.1 per cent on a like-for-like basis.
Costa’s profits jumped by 29 per cent to £90.1million after worldwide sales reached £1billion for the year, an increase of 22.6 per cent on a year earlier.
In April 2011 it targeted an increase in sales from £659 million to £1.3billion by 2016 but in light of today’s performance it said its new milestone was now to double sales to around £2 billion by 2018.
During the year it opened a net figure of 186 new stores in the UK, taking the total number of outlets to 1,578. The division also features more than 2,500 Costa Express units, including 700 in partnership with Shell, and a growing overseas portfolio.
The news will be a fillip for the Government. The most recent official figures showed unemployment rose by 70,000 to 2.56million between December and February with a rise of 20,000 among young people 979,000.
It follows a string of job cuts announcements in the last month. HSBC said last week it was axing 3,166 UK jobs, although it added 2,017 would be created elsewhere in the business. Britain’s largest insurer Aviva announced 2,000 job cuts worldwide with the majority expected to occur in the UK and pharmaceutical giant AstraZeneca announced 1,600 job cuts as it closed its Cheshire-based research and development plant.
Last week, Asda announced a 4.5 per cent increase in 2012, reaching £22.8billionn from £21.8billion a year earlier.
By the end of the year, it will have opened four new small format supermarkets, five superstores and one non-food outlet.
Asda chief executive, Andy Clarke Clarke said: ‘I’m proud that in the continuing and very challenging trading environment we were able to increase total sales last year.
‘This shows that we are continuing to get it right for customers.’
Asda said its investment had shifted to growing its online and mobile business, with stores supporting internet and smartphone channels.
The firm is also investing in Click and Collect – where customers order online for collection in store – for George clothing and general merchandise in all its stores.
Asda said customers will be able to collect grocery shopping from almost 200 outlets by the end of 2013, including from stores and lockers at petrol stations.
The supermarket has also increased its home shopping capacity with the opening of its third picking centre in Nottingham last month creating more than 600 new jobs.
Costa Coffee has grown from a small coffee shop founded by Italian brothers, Sergio and Bruno Costa in 1971 to a high street staple with 1,576 branches nationwide and a further 900 overseas.
It is now the UK’s largest chain, with 40 per cent of the UK coffee shop market serving 320million cups of coffee to caffeine addicts last year.
Costa has 253 outlets in 28 cities in China, of which 89 were opened in the last year. It launched its first branch in Phnom Penh, Cambodia, in February.
Worldwide sales hit £1billion in its latest results, with a target of £32billion set for 2018.
The coffee chain’s total sales rose 24.1 per cent last year, while profits rose 29.3 per cent to £90.1million, Whitbread said today.
It hasn’t all been smooth sailing with its ubiquity in Britain’s town centres has seen campaigns started to keep it from setting up in some areas such as Totnes in Devon.
It was eventually forced to abandon plans to open a shop in the Devon town after a high-profile campaign last year saw several thousand people sign a petition against Costa warning Totnes risked becoming a ‘clone town.’
Similar opposition has faced plans for other branches, including in Gloucester Road in Bristol and King’s Hill, near Maidstone in Kent.
Even one of Costa’s founders, who sold the business to Whitbread for £20million in 1995, has criticised the monopoly of a few firms in the market.
Bruno Costa said last year the coffee business was ‘monopolised by these three or four companies that don’t give much chance to the smaller ones’.
‘It reflects what the supermarkets have done to smaller shops in the high streets,’ he told his local newspaper the Croydon Advertiser.
‘I like Purley very much. It is still a small community which is nice to go down to the centre, but the likes of Tesco have taken over.
‘We were lucky at the time (we started Costa) that a Starbucks wasn’t nearby.’
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