Belfast Telegraph

Good weather and poor economy hits group's restaurant trade

By Philip Whiterow

Leisure group Whitbread has claimed the casual dining market had become "more difficult" as it reported a slowdown in sales growth.

The owner of the Beefeater and Brewers Fayre chains said that the economic situation and barbecue-style weather conditions in April meant its pub restaurant arm saw a 1.4% decline in like- for-like sales in the 13 weeks to June 2.

This was offset by further growth at Premier Inn and its Costa coffee division, although overall underlying growth of 1.7% for the period still represented a slowdown on the rate of 7.6% seen a year ago.

Shares opened around 5% higher yesterday as Whitbread said the trading momentum of the group as a whole remained in line with its outlook in April.

The first quarter of Whitbread's financial year saw Premier Inn grow like-for-like sales by 3%.

It derives two-thirds of its revenues from business travellers, while coffee chain Costa continued its recent progress with underlying sales rising by 4%.

Whitbread has just embarked on a five-year expansion programme that will increase the size of Premier Inns by 50%, double Costa's outlets and add 80-100 restaurants.

Total sales, including new outlets, rose by 9.2% with Costa sales up by 22.5% and Premier Inns by 8.1%, though restaurants were more subdued with growth of 0.2%.

Restaurants were affected by customers watching their spending and higher costs of petrol and other household essentials, as well as the extra bank holiday and royal wedding.

Chief executive Andy Harrison said the impact was most keenly felt in the provinces as London was helped by tourist demand. Premier Inn's London-based hotels also saw a much stronger performance than elsewhere over the past three months, with revenue per room almost 9% higher compared with a rise of 1.2% in the provinces.

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