Whitbread says rivals will step up their game

Kasmira Jefford
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WHITBREAD warned yesterday that it expected a more competitive environment this year as two of its biggest rivals “get their houses in order” and recover from recent setbacks.

The FTSE 100 group has performed well over the past year as customers trade down to its more affordable Premier Inn hotel rooms and Costa Coffee expands its global footprint.

By contrast, coffee rival Starbucks has been hit by allegations of tax avoidance and hotel rival Travelodge has had difficulty finding cash for much-needed refurbishment.

“We have been in a relatively benign competitive environment where two of our major competitors have been shooting themselves in the foot... One would expect companies of that size to get their houses in order,” Whitbread chief executive Andy Harrison said.

Reporting its fourth quarter figures, the group said it was still on track to meet annual forecasts, though snow in January had slowed sales growth in the 11 weeks to 14 February, particularly in the firm’s pubs and restaurants.

Like-for-like sales rose 2.7 per cent, down from a rise of 3.3 per cent in the third quarter. Costa like-for-like sales grew by 5.5 per cent while Premier Inn grew 2.9 per cent.

The company, which also owns the Beefeater and Brewers Fayre chains, has also been embroiled in the horsemeat scandal after finding horse DNA in its lasagne and burgers this month.

Harrison said he was dismayed by the discovery and that the firm plans to impose a new testing regime, including a new traceability system to track ingredients “from field to fork”.