MCA market insight director Steve Gotham asks why Whitbread is so shy about discussing its substantial restaurant and pub portfolio. He delves into the available data to see what can be gleaned about Whitbread’s F&B brands and their resonance with consumers

I am sure I was not the only interested party to be disappointed with the extremely economical coverage of Whitbread’s restaurant division performance with their recent FY19 results announcement. UK insights were totally dominated by details on Premier Inn, while news of Beefeater or Brewers Fayre or any other F&B brand did not get a look in as analysts were left to feed on scraps. By drawing on insights from MCA’s Operator Data index and Eating Out Panel, this article puts some more meat on the restaurants’ rather bare bones.

Starting with a recap of what the company did reveal, we learnt that total UK F&B sales fell by 0.3% in the year to April 2019, after growth of 2.5% previously. Unsurprisingly, like-for-like growth also disappointed, declining by 2% after a modest rise of 0.4% in FY2018. The business noted that performance had been impacted by ‘a more subdued casual dining market.’ We would not disagree that trading has slowed, though we would not say that the total branded restaurant market has shrunk in overall value terms during this period. As such, it is difficult to avoid the conclusion that the overall business is under-performing and losing market share.

Before examining these elements in more detail, it is worth looking at the F&B brand portfolio in a little more detail. As at December 2018, we calculate the estate was led by Beefeater (with 169 UK venues), Brewers Fayre (162), Table Table (66) and Bar + Block (8). Across these chains, there was modest annual growth at Beefeater and Bar + Block, and slight net decline (including some rebranding) at Brewers Fayre and Table Table. In terms of sales, we estimate these four brands generated combined turnover of c.£570m in 2018, and broadly flat year on year. This would equate to share loss.

Several of MCA’s consumer tracking insights from the Eating Out Panel can steer us in the direction of reasons where and why the business is under-performing. Across the two main restaurant brands of Beefeater and Brewers Fayre it is conspicuous that the chains are struggling with weakening awareness and consideration ratings by consumers. This would suggest the investment in brand marketing and customer relationship building is either being reduced or not being as effective as previously.

When customers are brought on-site, however, restaurant teams are doing a good as it is encouraging to see that NPS scores are up at both brands at lunch and dinner for the year to March 2019 compared with previously. This positive finding is encouraging but needs tempering by the finding that the all the Whitbread brands are having a tough time in securing higher spends from customers, particularly at lunch.

Certainly, it is far from an easy market out there and Whitbread is by no means alone in facing major challenges in revitalising restaurant performance. It should have a benefit from the established nature of its core restaurant brands. However, it is tempting to believe there is a degree of tiredness creeping into consumer perceptions, and that these brands are not quite as relevant as they used to be. Indeed, I was struck by one of the few comments of note in the results statement: that Whitbread’s ‘food and beverage offer is integral to the hotel operations, performance and guest experience.’ I am sure this is the case and will be boosting breakfast trade. However, the restaurants are much more than just a service arm to the hotels and they need more compelling reasons to visit and have greater destination appeal at the core lunch and dinner day-parts too. Without this and more specific proposition development (and/or possibly a disposal), the results statements unfortunately are likely to remain somewhat threadbare.