Damp summer slows Whitbread's sales as spending stutters

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The Independent Online

Whitbread, the leisure group, yesterday reported a slowdown in sales over the summer, with the cold weather dampening the popularity of its beer gardens and consumer spending beginning to stutter.

Whitbread, the leisure group, yesterday reported a slowdown in sales over the summer, with the cold weather dampening the popularity of its beer gardens and consumer spending beginning to stutter.

Like-for-like sales across the group, which includes Beefeater restaurants, Marriott hotels and Travel Inn, were up 3.1 per cent over the 24 weeks to 19 August, slowing from growth of 3.4 per cent in May. Its shares fell 5 per cent to close down 37.5p at 779p.

"Some of the brands achieved slightly lower like-for-like sales growth than anticipated," said Alan Parker, Whitbread's chief executive.

Whitbread's pub restaurant chains, which include Beefeater and Brewers Fayre, were among the worst hit. Like-for-like sales slumped 0.4 per cent over the period. Forty outlets have also been closed, undergoing a major refurbishment. But growth in its high street restaurants, such as Pizza Hut and TGI Fridays, has also failed to accelerate through the year. Sales growth was flat at 3 per cent. The company said there were some signs of consumers beginning to rein in spending in the face of rising interest rates.

Its budget hotels division is growing strongly. Like-for-like sales in Travel Inn were up 6.3 per cent in the 24 weeks to 19 August. This division is now the largest part of the group following the recent £505m acquisition of Premier Lodge.

Mr Parker, who became chief executive earlier this year, is to complete a strategic review of the group in October. This may result in a sell-off of some of Marriott's assets. Sales at the four-star hotel chain had rebounded compared with when the Iraq war brought tourism to a halt. But like-for-like sales in Marriott have slipped from 6 per cent growth in May to 4.9 per cent over the 24 weeks to 19 August.

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