Costa Coffee owner Whitbread to cut costs amid rising wages and weak pound
Premier Inn and Costa Coffee owner Whitbread has revealed plans to slash costs by around £150 million over the next five years a fter being hit by the plunging pound and a surging wage bill.
The group, which employs around 45,000 staff, has been hit hard by the new national living wage, while it also faces extra costs from the falling pound and business rates.
It will look to make savings across a "wide range of areas", including better management of its workforce and its supply chain.
The group said: "These efficiencies will help to offset, over time, the considered investments we are making in our infrastructure, products and brands and in the known sector cost headwinds including the national living wage, business rates and foreign exchange inflation."
But chief executive Alison Brittain pledged to continue investing and expanding the group's brands.
Whitbread is ramping up growth targets for Premier Inn from its current aim for 85,000 rooms by 2020 to "beyond 100,000" UK rooms.
It also said while its target is for 2,500 Costa stores by 2020, there is the potential for more than 3,000 coffee shops.
Ms Brittain - a former head of retail banking at Lloyds Banking Group, who took the helm at the end of last year - said: "We will invest in our people and their skills, in innovation in our customer propositions and in improving our IT systems and digital capabilities to develop an efficient platform that will support our growth for many years to come."