Whitbread has reiterated that its key focus will be on hotels following the sale of Costa Coffee to Coca-Cola, though said it would retain its 49% investment in Pure, the healthy-eating grab and go concept.
In a half year trading update this morning, Whitbread said it reported total UK accommodation sales growth of 4.8% and like-for-like accommodation sales growth of 0.2%, impacted by weaker consumer demand
Its restaurants, which include Brewers Fayre and Beefeater, were down 1.0% in Q1 and down 3.3% in Q2 to give a H1 average of down 2.6%.
The group is launching a new format, ‘Zip by Premier Inn’, which offers small, simple rooms for the underserved “extra-value seeking customer”, with the first to open in Cardiff in 2019.
In FY19, Premier Inn is expected to open 4,000-4,500 rooms in the UK and Germany, including two hotels comprising 379 rooms in Germany.
Alison Brittain, Whitbread chief executive, said a significant majority of the proceeds of the sale of Costa to The Coca-Cola Company for £3.9bn would go to shareholders, pending regulatory approval in the EU and China.
She said: “Following the sale of Costa, Whitbread will be a focused hotel business with operations in the UK, Germany and the Middle East. In the first half of the year, Premier Inn delivered total UK accommodation sales growth of 4.8%. Although we have seen some weakness in consumer demand over the summer, we have made further encouraging progress with our efficiency programme, ensuring we remain on track with our plans for the current year.”
With a UK network of over 74,000 rooms, Whitbread has a further 13,000 rooms in its pipeline and sees potential to extend its growth runway in the UK to 100,000 rooms and beyond.
In Germany, its pipeline is now nearly 6,000 rooms, equivalent to 30% of its total pipeline for Premier Inn.