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Whitbread confirms closures of its underperforming restaurants

Whitbread, the owner of Premier Inn, has announced that it will proceed with selling 126 of its underperforming restaurants and will eliminate 1,500 jobs.

In March, it was initially reported that the operator behind brands like Brewers Fayre and Beefeater would be closing several locations or converting them into additional Premier Inn hotel rooms.

In its Preliminary Results Announcement released on April 30, the company outlined its two-pronged plan for these managed restaurants as part of an overall 'optimisation' process:

“Converting 112 lower-returning branded restaurants into new hotel rooms having first transferred the delivery of F&B to an integrated restaurant.”

“Exiting 126 lower-returning branded restaurants; they will continue to operate as they do now so that they can be sold as going concerns and we have already agreed to sell 21 of these restaurants for £28 million.”

The preliminary results also revealed that there would be a 4% reduction in the company's workforce.

“AGP [the Accelerating Growth Plan] will result in the reduction of around 1,500 roles out of a total UK workforce of 37,000.”

The announcement also stated that Whitbread would 'seek to find alternative opportunities wherever possible' for those who lose their jobs.

“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,” said Whitbread chief executive Dominic Paul. “The short-term impact on our profit performance this year will be more than offset by an uplift from FY27 with further increases thereafter in both margins and returns as we open more of the new extensions.”

According to Whitbread, the AGP will enhance the margins of its UK business. This will involve a 'one-off' £20-25 million reduction in UK adjusted profit before tax (PBT) and exceptional items. By FY27, it is expected to result in an incremental adjusted PBT of £30-40 million.