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Comment: Whitbread gets message that Costa is good to go

COSTA is expected to confirm this week that it continues to pull in customers who show few signs of allowing austerity to force them into giving up their skinny lattes.

The Whitbread-owned chain is expected to post sales up 6 per cent in the third quarter, and that’s before factoring in any boost from consumers shunning US rival Starbucks over its controversial tax payments.

The bigger issue surrounding Costa is whether it will be spun off. Speculation about a sale or float, driven by the appointment in April of Whitbread financial director Chris Rogers as managing director, has helped push the group’s shares by 50 per cent this year.

Offloading Costa would certainly be consistent with Whitbread’s policy of divesting businesses. Among those it has sold in recent years are the UK franchise operations of Marriott Hotels, Pizza Hut and TGI Friday’s. Also gone are the David Lloyd Leisure gym and tennis outlets, most of Whitbread’s pubs, and its shake in Britvic.

Costa became Britain’s biggest chain of coffee stores two years ago and now has a 40 per cent share of the market. The latest trading figures show it has no intention of loosening its grip.

It is also among those companies creating jobs, with 10,000 recruits expected over the next three years. They may not be the best paid, but in a work-starved economy they provide a foothold to a career, particularly for the young.

Loyalty scheme may save shops

SHOPPING guru Mary Portas came up with a list of ideas for reviving town centres, though one idea with considerable merit hardly got a mention: a loyalty card scheme for smaller shops.

As we report opposite, Perth-based Stewart Cameron’s Clickypoints business is soon to go live and is already proving popular among independent chains caught in the crossfire between their bigger rivals and online operators.

He says that its main advantage over other schemes is that the points earned by shoppers represent real value. That should help drive customers into those stores that sign up for it.

Clickypoints seems such a simple idea it is surprising no-one has come up with it before now. It won’t save those businesses which have deeper trading concerns, but as one of the bigger chains keeps reminding us, every little helps.

Playing the Bond market

THE new investor in Aston Martin could not have had a better marketing boost than to see its most-famous model feature in the latest James Bond movie Skyfall. And this has nothing to do with bullet-proof screens, machine guns and ejector seats.

Italian private equity fund Investindustrial is pumping £150 million into the British company for a 37.5 per cent stake and hopes to repeat the turnaround it achieved when it bought motorcycle firm Ducati and then sold it to Audi.

However, generating another £350m that Aston Martin requires over three years is nothing short of a Bond mission.

Its current trading suggests it will not find it easy to raise that sort of figure without seeking further external support. Getting its balance sheet sorted out may require doubling its output of 3,000 cars a year.

Twitter: @TerryMurden1

 

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