• Britain’s biggest hotel & coffee shop operator.
• Two main brands – Premier Inn & Costa.
• CEO Andy Harrison set an ambitious 5 year
expansion plan, hoping to expand/merge into
• Aim is to expand Premier Inn and hoping to
near double the 1871 costa stores.
• Founded in 1998.
• An investment of £300,000 to set up chain of
self-service coffee-to-go stations in
supermarkets, service stations and airports.
• Coffee Nation is now the UK market leader,
supplying over 850 organisations across the
Motives + Links
• In 2011 Whitbread announced that sales for the Premier Inn & Costa
Coffee had fallen.
• Whitbread™ made the investment of £60 million to takeover the business
as sales were becoming weak.
• Both firms have the objectives of growth/expansion and Whitbread™
buying them suits both companies.
• Start of 2011 Whitbread™ were doing fine with Premier Inn going up from
a 4 to a 5 star hotel and Costas ‘flat white’ being regarded as an affordable
• Purchase allowed them to expand Costas brand i.e. the costa to go
machines at service stations – helping the aim of doubling the number of
– Aimed to change all Coffee Nations 900 coffee to go stops to Costa ones.
– Plan to expand Costa Express machines to 3000 locations.
– 2012/13, a deal with Shell made it possible for 1368 costa express units to be put
Factors Influencing Success Of
• Both firms looking to grow
– Takeover will allow this to happen
• Both firms are in similar market. Allowed
Coffee Nation® to be taken over by Costa
which is the coffee shop market leader and
fastest growing coffee store.
Impact/Reactions Of Stakeholders
• Consumer – Positive reaction, the takeover has
made it possible for consumers to get Costa
Coffee at service stations etc.
• Suppliers – Because they are in similar markets it
will be easier for the supplier to supply both
• Workers – could have a negative impact as Coffee
Nation® specialise in coffee-to-go which do not
require any staff to monitor them.
Impact On Performance
• Share price has been steadily increasing since
the takeover in 2012, before that the share
price was quite low.
• Done well for Costa as
their brand name is getting
• Increase in revenue for
both businesses and a
major increase in sales.
Would There Be Any Reason The
Government Would Step In About This