Whitbread hit by consumer woe as pub restaurants disappoint

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Whitbread, the leisure group subject to persistent break-up speculation, admitted yesterday that the performance at its pub restaurants, including the Beefeater chain, remained disappointing.

Almost all of the company's divisions were in decline in the 39 weeks to 1 December. Like-for-like sales fell 2.1 per cent at its pub restaurants while sales at its high street restaurants were down 3.4 per cent and turnover at the David Lloyd tennis clubs fell 0.4 per cent. On the high street, Pizza Hut and TGI Friday's were hit hard by the consumer slowdown and suffered double-digit declines in like-for-like sales. Premier Travel Inns, the budget hotels arm, was the only business to see an increase in like-for-like sales, of 7.3 per cent.

Alan Parker, the chief executive, said: "The pubs restaurants business remains challenging and these results are below what the business is capable of producing. The underlying issue has been a long-term volume decline and it will take some time to reverse this trend." He said Whitbread had seen a positive initial reaction from customers to new menus and pricing.

Apart from Premier Travel Inns, the only other bright spot was the 400-strong Costa coffee shop chain. Mr Parker said the chain was proving very resilient to the consumer downturn, adding that the group is opening a new outlet on average one in every four days in the UK.

The group is selling its Marriott hotels, its Chiswell Street Brewery site in London and its stake in the drinks maker Britvic, which floated last week.