Premier Inn owner Whitbread says UK trading is strengthening, as union protests over 1,500 job cuts – business live
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The hotel sector can be a good gauge of economic confidence, tracking whether people are splashing out for trips away and if firms are stumping up for business trips.
And this morning, Premier Inn owner Whitbread has reported that recent trading in the UK has been “more encouraging”, as it prepares to face union anger over plans to cut 1,500 jobs.
The company says it remains “confident in the full year outlook”, after growing total sales by 1% to £739m, “driven by improved UK trading and continued progress in Germany”.
In its latest financial results, Whitbread reports that sales growth was flat (0%) in the UK for the 13 weeks to 30 May 2024, although it did grow by 15% in Germany (where trading had been weaker).
That 0% figure, though, hides a pick-up after a weak start to the first quarter of Whitbread’s financial year.
The company told shareholders:
Having been 1% behind last year in the first seven weeks, our trading performance strengthened during the remainder of the quarter and accommodation sales recovered to be in line with last year and up 55% versus FY20.
But, on a like-for-like basis, accommodation sales shrank by 2%, along with a 1% drop in food & beverage sales.
Whitbread reports that midweek business demand and peak leisure demand both remain “robust”, however last-minute demand for weekend stays has been “slightly softer”, particularly in London.
Perhaps the post-pandemic surge in trips away has faded?
Back in April, Whitbread reported strong results for the last financial year, including a 13% rise in sales in the year to 29 February.
Whitbread also says net inflation is now expected to be at the lower end of its guidance as a result of “increased cost efficiencies”.
The company, and its shareholders, will feel the wrath of the Unite union later today when they gather for its annual general meeting at its offices in Dunstable, Bedfordshire.
Unite are planning a protest over Whitbread’s plans, announced in April, to cut 1,500 jobs.
The union says Whitbread have refused to consult with them, or answer basic questions on the redundancy process.
Unite general secretary Sharon Graham said:
“Rarely is a company so shameless as to celebrate leaping profits and dividends by announcing mass job cuts.
“But generating runaway profits while trampling workers is business as usual for Whitbread. This is a firm that refuses to pay the real living wage and does not even provide company sick pay for its underpaid and overworked staff.
“Unite will be holding the company to account for its disgraceful race to the bottom behaviour and offering full support to our members impacted by these cruel and unnecessary redundancy plans.”
The agenda
8am BST: Kantar’s grocery price inflation
10am BST: Eurozone inflation rate for May (final estimate)
10am BST: ZEW index of German economic sentiment
1pm BST: Unite protest ahead of Whitbread’s AGM
1.30pm BST: US retail sales for May
2.30pm BST: Whitbread’s AGM begins