Coffee Republic has pinned its hopes for growth on regional expansion, after admitting disappointing sales in London.

The firm, the UK's largest independent coffee bar chain, said sales fell 10% below target last month.

"Sales post-Christmas have been depressed by the performance in the City and central London, which continues to be a challenging trading environment," the company said.

But the firm, which is planning to open up to 20 new bars by March next year, said its strategy of regional expansion would "help mitigate" the London slide.

Coffee Republic shares stood unchanged at 5.5p in late morning trade on Wednesday.