Whitbread to shed 1500 jobs under plans to scale back restaurant estate

The group, whose portfolio includes the Bar + Block, Brewers Fayre and Beefeater brands, says the two-year plan will result in the reduction of around 1,500 roles across its UK workforce.

“We recognise that our transition will impact some of our team members so we will be providing support throughout this process, and we are committed to working hard to enable as many as possible of those affected to remain with us,” says Dominic Paul, Whitbread chief executive.

The plans to sell and convert a chunk of its branded restaurant estate were first hinted at last month​​.

According to the group’s financial results for the year ended 29 February 2024, published today (30 April), the 126 restaurants earmarked for disposal generated revenue of £147m and a loss before tax of £9m; while those marked for conversion, which will be situated next to Premier Inn sites, generated revenue of £121m and a loss before tax of £19m.

In total, the group’s UK business, which also includes the Premier Inn hotel chain, reported a pre-tax profit of £588m, a 19% increase on the year before.

Noting that the ‘strong performance’ in its integrated hotel restaurants was offset by ‘softer trading’ in a number of its branded restaurants, the group has developed its AGP, which it says will ‘optimise’ its F&B offer, unlock 3,500 room extensions and ‘drive increased margins and returns’.

The plan will require some £500m of investment over the next four years, which will be funded through the group’s existing annual capital expenditure programme.

All 126 restaurants earmarked for disposal will continue to operate as they do now so that they can be sold as going concerns, with Whitbread having already agreed to sell 21 sites for £28m.

The proceeds from the disposals will be used to help fund investment in building integrated restaurants in the hotels, as well as the construction of new hotel rooms across the estate.

Where sites are to be converted into extra hotel rooms, ‘tailored, integrated’ restaurants will be built inside the neighbouring hotel building, mirroring the format already available across 387 of Whitbread’s hotel sites.

The changes outlined are expected to result in a one-off reduction to UK adjusted profit before tax in the next financial year of between £20m and £25m.

However, Paul adds that the short-term impact on profit performance will be ‘more than offset’ by an uplift from 207, with ‘further increases thereafter in both margins and returns as we open more of the new extensions’.

The plan will leave Whitbread with a branded restaurant estate of 196 sites, which it says will continue to operate as normal.

As part of its announcement today, the group also announced plans for a share buyback programme worth £150m.