Whitbread restaurants hit by ‘general decline'

01 January 2000
Whitbread restaurants hit by ‘general decline'

WHITBREAD has blamed a general decline in consumer spending for the drop in profits in its restaurants division over the past six months.

Chief executive David Thomas said market conditions were the main reason for a 5% drop in operating profit and a 6.2% fall in turnover at Whitbread's restaurants in the six months to 29 August. The disposal during the period of 40 Beefeater pub restaurants and 82 Pizzaland and Pizza Piazza outlets also contributed to the fall in turnover, he said.

Last year, the group sank £50m into revamping Beefeater. As it announced a drop in like-for-like sales of 4.3% for its remaining 300 sites, it also confirmed the departure of the division's managing director, Simon Wood. A Whitbread spokesman said: "We are not giving any reasons why he has left, and we do not know where he has gone."

In September, Whitbread expressed caution over its restaurant expansion programme. But last week managing director of restaurants Richard Simpson said the group may consider purchasing another group of branded restaurants but would wait until an economic slowdown provides a "shake-out" in the industry.

Performance at Whitbread's hotels was more positive. Over the six-month period, average occupancy was 90% at budget chain Travel Inn and 79% at the group's Marriott properties. The company plans to double the size of Travel Inn over the next five years with investment of £60m a year. "This will be the major focus of our growth. Supply is currently lagging demand," said Thomas.

Whitbread reported an overall 7% fall in pre-tax profits to £192m, on turnover of £1.6b.

by Christina Golding and Louise Bozec

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