Like-for-like sales growth stalled at Whitbread's two major businesses in its third quarter as consumer confidence ebbed in the UK during the final months of 2017.
The owner of the Premier Inn hotels and Costa Coffee said in a trading statement on Thursday that total sales in its October-December quarter were up 5.6%, but like-for-like sales growth of just 0.3% reflected "recent tougher market conditions".
Costa and Premier
Like-for-like sales - revenues from operations with comparable figures from a year ago - at Costa Coffee fell 0.1% during the quarter.
"The well-publicised weak retail market footfall is negatively impacting our high street stores' like-for-like performance and we expect this to continue for some time," said Alison Brittain, chief executive.
Total sales growth of 6.9% in the quarter, however, appeared more impressive as the company increased stores - concentrating on key locations and drive-thrus.
Premier Inn recorded like-for-like sales growth of 0.5% and total sales 4.7% in the quarter - but its performance moderated as the budget hotel market weakened.
Chief executive Brittain (left) continued: "We remain committed to delivering our strategy to invest in the attractive structural growth opportunities in the budget hotel market and the growing coffee markets, in both the UK and internationally.
"We do expect the tough UK high street environment and inflation in our sector to continue to pose challenges in the year ahead.
"However, we have good momentum in the delivery of our plan to enhance our UK market leadership positions, create an international business of scale in Germany, China and Costa Express, and develop a more efficient infrastructure."
Investors warmed to the strategy and levels of total sales growth achieved by Whitbread and after an hour of trade on the London Stock Exchange, the shares were up 2.7% at £39.65.