Whitbread reports drop in restaurant and pub business |
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Thu, 16 Jun 2005 11:00
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The British leisure group, Whitbread, has reported a drop in sales at its pubs, restaurant and health club business, which, the group says, is a direct result of decreased consumer spending in the country.
The group owns high street restaurants such as Pizza Hut, TGI Friday and Costa Coffee, which have shown a slight drop in sales for the first quarter of the year as compared to the same period last year. The pub chains of Brewsters and Brewers Fayre have seen a more prominent fall of 1% for the first 13 weeks ending May.
David Lloyd Leisure, the health club chain of the company, has reported flat sales too. According to the finance director, Christopher Rogers, membership numbers at the club had stabilized and initiatives were being taken to improve service and make the membership more appealing.
The only positive sign came from the budget hotel chain, Premier Travel Inn, which reported an increase of 8.2% in sales. According to company sources, this is primarily due to an increase in room tariff than in occupancy, which in fact has gone down marginally.
| The recently acquired hotel chain of Premier Lodge also delivered a growth of 4.5% in sales. Marriott hotels owned by the group have also done well, but Whitbread is selling this business.
The group feels that they need a turnaround in other businesses too and could not bank on the performance of Premier Travel Inn alone if the group has to meet its profit estimates. As per Mr Rogers, a lot is being done to reverse the performance and the results should be there in the next quarter.
The results of the group are in accordance with the overall market situation in the UK, with some businesses such as JJB Sports, B&Q and Carpetright showing a downtrend, while others like Majestic Wine, Tesco and Halfords delivering growth.
Chief Executive of the group, Alan Parker, did not comment on private equity groups looking to break up the company. All that he said was, “We are well aware of our obligations and we have not made any comments at all.”
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