Premier Inn owner Whitbread sees UK sales falter amid shake-up of pub business
Hospitality giant Whitbread has reported a downturn in UK sales amid a “challenging market backdrop” and a restructure of its pub and restaurant business.
The Premier Inn-owner told markets this morning that overall sales in the UK fell five per cent in the first quarter of the financial year, driven by a 16 per cent drop in food and drink sales.
Accommodation sales in London outperformed the UK, up 3.9 per cent versus last year.
Whitbread said food and drink sales performed “in line with expectations” amid a significant shake-up of its restuarant business.
Last year, the hospitality giant said it would convert 112 of its food and drink sites into hotels – most already next to Premier Inns – and sell 126 sites, cutting 1,500 jobs in the process.
Whitbread said the additional capacity would add 3,500 rooms to its portfolio, while property disposals have so far contributed £250m – £300m to the business.
Dominic Paul, Whitbread CEO, said: “In the UK, we continue to outperform against a challenging market backdrop, with the strength of our brand and commercial programme continuing to drive total accommodation sales and RevPAR growth ahead of the market.
“Whilst the short-lead nature of our business means that our forward visibility remains limited, our forward booked position is ahead of last year and we remain confident that we can continue to outperform the market.”
Sales in Germany, which make up a smaller percentage of Whitbread’s business, rose 15 per cent quarter on quarter, continuing a strong streak of growth.
“In Germany, we delivered another strong trading performance, led by the increasing maturity of our estate and our commercial initiatives,” Paul said.
Whitbread expects its German arm to turn its first profit this year.
It has targeted incremental profit of at least £300m by 2030 for the business as a whole, as well as £2bn for shareholders in share buybacks in dividends.