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Having recently announced another growth in sales by 6% with underlying profits increasing by over 20%, Costa has now been named the UK’s favourite coffee shop for the fifth year in succession. In London, the most competitive area of this market, 39% of participants said Costa was their favourite, 16% more than its nearest rival, Starbucks.
But why is Costa continuing to lead the way over its rivals? In this spotlight, we look at a number of factors that might be contributing.
Costa as a brand has a high profile in the UK, however, as a company it has continued to look at new ways to drive the business forward and engage with its customers, listening to what they want from the brand, not just from the products, but from the environment as well. In the past few weeks Costa announced the opening of a new, carbon neutral outlet in Telford – the first of its kind in the UK.
Working in partnership with Hammerson, Costa has used the latest technologies including super insulated façade and photovoltaic panels to create an outlet that meets the highest environmental targets. This is typical of Costa and its drive to give customers what they want.
Costa has also identified that it can have the best products in the best location but, without a good team to deliver service, customers will go elsewhere. With this in mind, parent company, Whitbread PLC, has established and invested in a dedicated training programme to provide apprenticeships in customer services across its brands, including Costa. Costa employs over 11,000 people and is creating around 1,500 jobs this year and over 4,500 jobs in the next three years in the UK. The message is clear, deliver great products with great service and listen to your customers, then your brand will grow. And Costa’s results are only set to grow further with 569 new coffee shops planned for the UK in the next five years and more growth planned in China, where it already has 49 outlets.
In the retail world of old, it was always said that “the customers is always right”, what Costa is doing is delivering that sentiment; it has listened to its customers, identified what is important to them and is delivering these elements.
Needless to say, Costa’s impressive performance and the acquisition of one of its franchised operations sparked a number of rumours that Whitbread was planning to offload the coffee shop chain. However, chief executive Andy Harrison said that Whitbread would continue to invest capital in brands, including £25.9m in Costa, and denied this speculation.
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