Whitbread sees restaurant slowdown

Leisure group Whitbread said the casual dining market in the UK had become “more difficult” as it reported a slowdown in sales growth today.

The owner of the Beefeater and Brewers Fayre chains said the economic situation and barbecue weather conditions in April meant its pub restaurant arm saw a 1.4% decline in like-for-like sales in the 13 weeks to June 2.

This was offset by further growth at Premier Inn and its Costa coffee division, although overall underlying growth of 1.7% for the period still represented a slowdown on the rate of 7.6% seen a year ago.

Shares opened around 5% higher today as Whitbread said the trading momentum of the group as a whole remained in line with its outlook in April.

The first quarter of Whitbread’s financial year saw Premier Inn grow like-for-like sales by 3%.

It derives two-thirds of its revenues from business travellers, while coffee chain Costa continued its recent progress with underlying sales rising by 4%.

Whitbread has just embarked on a five-year expansion programme that will increase the size of Premier Inns by 50%, double Costa’s outlets and add 80-100 restaurants.

Total sales, including new outlets, rose by 9.2% with Costa sales up by 22.5% and Premier Inns by 8.1%, though restaurants were more subdued with growth of 0.2%.