Restaurant and pub groups fear onsetof a new recession

FEAR of recession hit the restaurant and pub industry this week, with some of the UK's biggest groups axing expansion plans in preparation for tougher economic conditions.

Whitbread was the first to express its fears publicly. In May the group was set to open 80 restaurants and the same number of pubs as part of a £200m investment package: now it is less sure.

"We are being very cautious about which developments we are allowing to proceed," a company spokeswoman said.

The group, which owns the TGI Friday's, Bella Pasta, Pizzaland, Café Rouge and Pizza Hut restaurant chains, is concentrating on its David Lloyd sports centres and Travel Inn, its budget hotel chain.

Vaux is also concentrating on its hotels. It put half (350) its tenanted pubs up for sale this week, together with breweries in Sunderland and Sheffield to concentrate on its Swallow Hotel chain.

Bass, which has about 360 pub-restaurants, could also be heading for a major review, suggest insiders, although the company is refusing to comment officially before its next trading statement. by Christina Golding