Recession hits fourth-quarter sales at Premier Inn

Premier Inn sales slipped in the final quarter of last year as the downturn in the economy hit the budget hotel chain, Whitbread revealed today.

Like-for-like sales in the final quarter of the year were 3% down on the previous year, with a fall in occupancy mainly to blame, the company said in a full-year trading update. There has also been a slowdown in Whitbread's pub restaurant business.

Although sales at Costa Coffee were also broadly flat for the fourth quarter, Blue Oar Securities leisure analyst Mark Brumby pointed out that the chain had outperformed rival Starbucks. He added that Premier Inn was doing well in comparison to three-star and four-star hotel competitors

Overall, group like-for-like sales in the 50 weeks to 12 February 2009 were up 4.9% with total sales 11.5% ahead of last year.

Alan Parker, chief executive of Whitbread, said: "We believe that Whitbread's brands are well placed for the challenging year ahead."

The company said it will slow its organic expansion in the coming year and capital expenditure is to be halved to around £170m.

Whitbread's Patrick Dempsey will be under the spotlight at the next Arena Face to Face event, this April.

Good customer service more important than price in restaurants >>

Restaurant and pub chains see rise in like-for-like sales >>

Alan Parker - bringing Whitbread into focus >>

Whitbread appoints Patrick Dempsey as its executive director >>

By Chris Druce

E-mail your comments to Chris Druce here.