Monday 27 January 2020

Costa Coffee boss Christopher Rogers steps down

The Costa Coffee outlet at Temple Bar
The Costa Coffee outlet at Temple Bar

Elizabeth Anderson

Leisure giant Whitbread has appointed a new managing director for its Costa arm as Christopher Rogers, who has been in the role for almost four years, steps back from the business.

Dominic Paul, who is currently a director at cruise company Royal Caribbean International, will take over the role from early June.

Mr Paul has been responsible for growing Royal Caribbean's international business outside its US operations, with a particular focus on Asia Pacific and China. It is expected he will bring this expertise to Costa, as the coffee chain pushes ahead with global expansion.

Costa is the UK’s largest coffee chain with more than 2,000 stores and a further 1,200 overseas including in China.

"Costa is a fantastic business with a huge amount of further potential - both in the UK and overseas - and I am extremely excited to be working with the team to take the business to the next level," said Mr Paul.

Costa Coffee recorded a 16.2pc rise in sales to £514.6m in the first half of its financial year. The brand accounts for almost half of Whitbread's total business.

However, the wider Whitbread business, which also owns Premier Inn, has recorded slower growth in recent months, with like-for like sales slowing to 1.7pc in the fourth quarter, compared to 3.5pc in the previous three month period.

Whitbread appointed a new chief executive last year, with Alison Brittain joining the company in December. The appointment was a surprise for analysts, as it was expected that Mr Rogers would be promoted to the role.

Ms Brittain has vowed to tackle slowing sales by focusing on innovation to stay ahead of competitors. However, she has come under pressure from shareholders to re-organise the group and to consider a radical break-up of the company following disappointing trading and a slide in its share price. This could involve a separation of its Costa coffee stores from the Premier Inn budget hotel chain and Beefeater pubs.

Ms Brittain has been asked several times whether a spin-off of Costa might be considered. In December, she admitted the board looked at it “from time to time”, but felt “at the minute” Whitbread was the best owner.

However, Simon French, an analyst at Cenkos Securities said a Costa spin off is now looking less likely.

"We believe that a spin off of Costa is less likely in the short-term meaning value continues to be trapped within the group acting as a brake on the share price," he said.

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