The boss of Costa Coffee owner Whitbread has welcomed the proposals being discussed to avoid labour shortages in cafes and restaurants following Brexit, such as the idea of “barista visas”.
Home secretary Amber Rudd is reportedly considering introducing “barista visas” to ensure coffee shops, restaurants and bars are fully staffed after Brexit. The proposal was made by Lord Green, chairman of thinktank Migration Watch UK, who suggested two-year visas for young EU citizens allowing them to come to Britain to work, although they will not be able to claim benefits. It is based on the current Youth Mobility Scheme for travellers from Australia, New Zealand and Canada.
Whitbread’s chief executive Alison Brittain, a former Lloyds banker, said: “What is really encouraging is that people are starting to talk about solutions and options.”
But she added that it would take many months for formal proposals to emerge. She noted the importance of the hospitality industry to the UK economy – it is the fourth largest industry, accounts for 10% of GDP and employs 5 million people.
Brittain said 80% of the company’s 50,000 staff were British nationals and the remainder EU citizens; Costa alone employs 14,500 people. Whitbread, which also owns budget hotel chain Premier Inn as well as Brewers Fayre and Beefeater restaurants, hires about 3,000 people every year.
The British Hospitality Association has warned that some hotels and restaurants would go bust without the steady stream of migrants, and that it would take businesses a decade to replace EU staff. The warning came after the human resources director of the sandwich chain Pret a Manger said just one in 50 applicants for jobs at the company were British.
Costa opened 184 new stores in the UK last year, taking the total to 2,218, and installed more than 1,500 Costa Express machines worldwide.
Brittain also warned of a “tougher consumer environment” this year, with household budgets squeezed by the weak pound causing price rises, static wages and higher petrol prices. “We are starting to see some changes in consumer spending patterns,” she said. She said recent sales data had shown a slowdown in consumer spending. “There is going to be some constraint on the pound in the average consumer pocket.”
The warning rattled investors, and Whitbread shares fell by 8% to £39.62.
Sales have slowed at Costa and Premier Inn, which are also under pressure from rivals such as Airbnb, other large coffee shop chains and the growing popularity of artisan cafes. Canada’s Tim Hortons is to open its first UK coffee shop in Glasgow in May. Brittain described this as an “interesting arrival in the UK”, but did not think the chain would expand rapidly here.
Whitbread’s full-year results showed Costa sales rose by 2% on a like-for-like basis in the year to 2 March, compared with 2.9% the previous year. At Premier Inn, sales growth slowed to 2.3% from 4.2%. Underlying group profits increased by 6% to £565m.
Whitbread has invested heavily in Costa, installing MerryChef ovens and microwaves. It has introduced a deal for a £1 bacon roll if it is bought with a coffee at breakfast time, with new salads to be added to the menu in the summer and hot food in the autumn.
The company has also negotiated new supplier deals, as the slide in sterling has pushed up the cost of imported materials since the EU referendum, as part of a £150m cost efficiency programme.
