Whitbread exiting branded restaurants ‘at pace’ amid strong Q1

Premier Inn owner Whitbread is executing its five-year transformation plan “at pace”, axeing 3,800 jobs and exiting its branded restaurants division.

Chief executive Dominic Paul said the initiative to offload brands including Brewers Fayre and Beefeater, announced in April, will “drive higher profits and returns” in the UK.

He made the comments amid reporting Whitbread’s Q1 FY27 results for the 13 weeks to 28 May 2026, which showed total group sales were up 2% year-on-year to £727m.

Positive trading performance in both Premier Inn UK and Germany was partially offset by a 5% reduction in UK food and beverage sales due to the branded restaurants exit.

In the UK, accommodation sales were up 3% versus last year, while total revenue per available room (revpar) was up 2%, which the firm believes is outperforming the midscale and economy market average.

Performance in London on total accommodation sales was strong with a 7% rise, while revpar was up 4%. Regions were also ahead, with both total accommodation sales and revpar up 1%

Paul said: “Strong leisure bookings mean that our forward booked position is ahead of last year and we remain confident in the full year outlook. Whilst we expect the impact of business rates to remain in line with our previous FY27 guidance, we are continuing to press the UK government for changes to FY28 and FY29.”

On the group’s website transformation plan, he added: “On 30 April, following a comprehensive review of all options to maximise value creation and deliver profitable growth, we outlined our new five-year plan. We are executing each element at pace, including: our proposed exit from all remaining branded restaurants in the UK to become a pure-play hotel business; refocused growth plans in the UK that will drive higher profits and returns; and accelerating cash flow and returns in Germany.

“With a favourable supply environment in the UK and Germany, we are focused on driving our best-in-class commercial and efficiencies programmes whilst at the same time reducing our capital intensity by £1b, a combination that will increase margins and returns and generate £2bnof free cash flow available for shareholders by FY31.”

In May, activist investor Corvex Management, which owns a 7% stake in the business, told Whitbread’s board that a sale is the “only credible path” to realise value for shareholders, according to reports in the Financial Times.

At the time, a Whitbread spokesperson responded: “Whitbread is focused on driving stronger returns for all our shareholders, and at our full-year results two weeks ago we announced the launch of our new five-year plan. This plan, which followed a rigorous review of our options to maximise value creation, is designed to deliver profitable growth and £2b of free cash flow for shareholder returns by FY31. We have made good progress on our transformation to date, and this new plan will go further and faster to deliver for our shareholders.”