Whitbread sales under pressure amid overhaul and tough UK market

Premier Inn owner Whitbread has posted falling sales amid a “challenging” UK market and a major restaurant overhaul.

The group, which also owns the Beefeater and Brewers Fayre chains, reported a 2% drop in total accommodation sales across the UK in its first quarter to May 29, with food sales plunging by 16% as it revamped its restaurants business.

Food and drink sales have been impacted by a restructure that Whitbread started in April last year, which includes cutting back its restaurant business to build more hotel rooms.

The £500 million plan, which executives dubbed “Accelerating Growth”, involves converting 112 branded restaurants into new hotel rooms and selling 126 more.

The plans announced in April 2024 will also see around 1,500 jobs axed as it looks to save about £150 million over the next three years.

Whitbread said on Thursday it was on track to save £60 million in this financial year.

On a like-for-like basis, it said first-quarter accommodation sales fell 3% and food-and-drink sales dropped 2%.

But it enjoyed a more robust performance in Germany, with total accommodation sales up 15% and food up 22%.

Dominic Paul, Whitbread chief executive, said: “We continue to execute our strategic priorities at pace and are making excellent progress with our Accelerating Growth plan and network expansion in both the UK and Germany.

“In the UK, we continue to outperform against a challenging market backdrop.

“Our forward booked position remains ahead of last year and whilst forward visibility remains limited, our commercial initiatives are underpinning our confidence in being able to continue to outperform the market.”