Whitbread is understood to be exploring the potential sale of its Beefeater chain and its other restaurant brands in order to focus its efforts on its hotel chain Premier Inn.

It has been reported that the business has hired advisors to explore options for its £700m pub and restaurant business, which also comprises Brewers Fayre and Bar + Block, according to the Telegraph.

Sources have said that discussions are at a preliminary stage and may not result in the business being sold, and they insisted that only a “small part” of Whitbread’s pub and restaurant business was being considered for possible disposal.

Whitbread’s advisers are understood to have begun contacting potentially interested parties, asking them to sign non-disclosure agreements ahead of a formal sales process.

It followed a warning in Whitbread’s recently published annual report of “the increasing divergence of performance of the hotel business and the food and beverage business”, which it warned could have a detrimental effect on the price charged for Premier Inn rooms.

Whitbread reported last month that its F&B sales were 40% ahead of FY22 for the 52 weeks to 2 March 2023, however they remained 4% behind pre-pandemic levels.

Increased spend per head was outweighed by a decline in customer volumes at its branded restaurants, despite their focus on the value-end of the market, however trading in the seven weeks to 20 April 2023 had seen an improvement in F&B – which were up 10% on FY23.

Chief executive Dominic Paul told MCA, Whitbread had to be mindful of the fact it operates in the value space, and that it was focused on boosting performance through improving the customer experience