Premier Inn owner Whitbread to cut 1,500 jobs amid restaurant chain closures

The hospitality group plans to close or convert more than 200 restaurants in a bid to ‘optimise’ its estate.

Whitbread said the plans are designed to ‘optimise’ its estate
Whitbread said the plans are designed to ‘optimise’ its estate (Mike Egerton/PA)

Premier Inn owner Whitbread has revealed it is to axe around 1,500 jobs across the UK amid plans to slash its chain of branded restaurants by more than 200 in favour of building more hotel rooms.

The group, which owns restaurants including Brewers Fayre and Beefeater, said the job cuts are still subject to consultation and come from its total UK workforce of 37,000 employees.

It said the move is part of a plan to “optimise” its food and drink offering to add more than 3,500 hotel rooms across its estate and increase “operational efficiencies”.

Whitbread said it plans to sell 126 of its less profitable branded restaurants, with 21 sales already having gone through.

It will also convert 112 restaurants into new hotel rooms.

Chief executive Dominic Paul said: “We recognise that our transition will impact some of our team members so we will be providing support throughout this process and we are committed to working hard to enable as many as possible of those affected to remain with us.”

The FTSE 100 company announced a pre-tax profit of £452 million for the year ending February 29, up 21% on the year before.

But its restaurants and pubs division, which also includes Bar+Block and Table Table, lagged behind.

The company’s total food and beverage sales were up only 7% year on year, driven mainly by breakfasts in the restaurant chain.

Food and beverage sales were down 2% for the seven weeks to April 18, the most recent period on record.

As a result, Whitbread said the cost-cutting programme will save about £150 million over the next three years.

The company also said it will offer a £150 million stock buy-back to shareholders in the next six months and increase dividend payments by 26% this year.

Mr Paul said the business’s financial performance was “really excellent” and that the Premier Inn hotel brand was the “driving force” behind the results.

Referring to the job cuts, he said the decision was “really challenging for us. It’s really important that we therefore handle that in the right way for our people.”

However, he added: “We also have made sure that we balance our business overall. What we’ve announced today will increase our profits and returns, and that’s also important for our people, because it enables us to continue to invest in our people within the business.

“We are a public company, so we also need to think about our shareholders. Our capital returns policy, of dividends and share buybacks, is within that context.”