Costa Coffee's like-for-like sales decline in the third quarter by 0.1%. Credit: Costa Coffee.

Costa Coffee’s like-for-like sales across all its outlets declined by 0.1% in the third quarter of fiscal year 2017 and by 1.5% for high-street outlets.

The results were revealed in a trading update from Costa’s parent company Whitbread. The only other time Costa’s sales have fallen was in February 2017.

Whitbread chief executive Alison Brittain said: “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.”

Data analysis firm Springboard noted that visitor numbers to UK high streets have declined by 1.6%.

Project Café2018 UK, Allegra World Coffee Portal’s annual study on the UK’s branded coffee shop market, reported that although the UK’s largest three coffee shop brands, Costa, Starbucks and Caffè Nero, continue to dominate the market, they are growing more slowly than in previous years. This has been attributed to declining disposable incomes and the rise of independent coffee shops and chains, such as Joe and the Juice, Gail’s, Grind & Co and Coffee #1.

UK like-for-like sales figures exclude recently opened stores from the total. However, if these figures are included, Costa’s sales grew by 7.2% in the third quarter, revenue grew by 6.9%, and its market share in the growing UK Coffee market increased. Whitbread links this success to the increase in number of new stores at ‘convenient locations’ such as drive-throughs, stations and airports, and investment into new food and drink products, including coconut milk-based drinks and rice boxes, which have been well received by customers.

Whitbread was ‘particularly pleased’ with the performance of Costa Express, which saw a 20.4% third quarter sales growth.

Costa remains popular with UK consumers. In early in January it was voted the ‘Nation’s Favourite’ coffee shop by Allegra’s Project Café2018 UK’s independent panel of consumers.

Jason Cotta, managing director for Costa UK & Ireland said: “We’re absolutely delighted to be recognised as the UK’s favourite coffee shop for the eighth consecutive year. This fantastic achievement wouldn’t have been possible without the support and dedication we receive from our partners and baristas.”