Value fuels Whitbread pub restaurant growth

Whitbread's focus on value fuelled a 1.7% increase in like-for-like sales at its pub restaurants for the year to 4 March.

The operator, whose restaurant brands include Beefeater, Brewers Fayre, Table Table and the all-you-can-eat concept Taybarns, saw revenues increase 1.3% to £466.2m across its restaurants. Average spend per customer and like-for-like covers were up 1.4% on last year.

"Our value for money restaurants have never been more relevant to today's family dining needs," said chief executive Alan Parker, who will be replaced by former Easyjet boss Andy Harrison on 1 September.

"Our well established meal deal offers, such as two meals for £9 at Brewers Fayre, have achieved significant success and now over a quarter of all diners take up these attractively priced menu options."

Over the year, Whitbread opened five new restaurants with 333 of its 373 venues now located adjacent to a Premier Inn. It also announced plans to build its first purpose built green hotel and Beefeater grill restaurant at Burgess Hill, West Sussex, due to open in autumn 2010. "This joint-site strategy enables us to deliver a superior customer experience and generate enhanced return on capital," said Parker.

He added: "Our restaurants continued to outperform the market as we attracted customers looking for great value food and drink in a comfortable environment.

"We refurbished 95 restaurants, spending on average £125,000 per site, to ensure a quality environment with value for money at the heart of everything we do. Our restaurants increased customer recommendation metrics by 5.6%."

Key goals​

Overall, including its Costa Coffee and Premier Inns brands, Whitbread recorded a 7.5% increase in revenue to £1,435m, despite a modest decline in like-for-like sales of 0.5%.

At Premier Inn, sales rose 4.7%, with like-for-like sales declining 4.3%. At Costa, sales increased by 23.4%, with like-for-like sales up 5.5%. Net debt was reduced by £109.7m to £513.4m. Underlying profit before tax was up 6% to £239.1m.

Parker said the company had achieved its three stated goals of outperforming the market, reducing operating costs and achieving cash flow neutrality.

"In 2009/10 we set out a commercial action plan for Hotels and Restaurants, to build on our competitive edge for the business market and aggressively target leisure customers," he said.

"We put in place four key levers: focused advertising, increased sales activity, Premier Offers and widening reservation distribution. This work will continue during the course of 2010/11 as we make an additional £8m marketing investment and realise the full benefits of dynamic pricing."