Whitbread exploring sale of its underperforming pub locations

According to reports, Whitbread, the owner of Premier Inn hotels, is considering selling or converting approximately a third of its Beefeater and Brewers Fayre pubs.

Last year, the FTSE 100 company engaged advisors to explore options for selling a portion of its 400-strong food and beverage arm. This decision came after the segment underperformed in comparison to its hotel business.

Sources informed The Times that Whitbread entered negotiations to sell to a US buyout fund. However, the deal fell through as the two parties couldn't come to an agreement on the price.

Whitbread has now reportedly tasked Christie & Co with putting between 30 and 50 of its poorest-performing sites on the market.

Several of Whitbread's pub-restaurants are situated adjacent to Premier Inn hotels but have encountered difficulties due to a lack of demand.

In Whitbread's 2022/23 annual report, Chief Executive Dominic Paul noted that despite an increase in hotel guests, the company's restaurants were trading 4% below pre-pandemic levels.

Simultaneously, sales across Whitbread's 840 UK Premier Inn hotels were reported to be 37% higher compared to the figures from 2019/20.

Reportedly, an additional 100 pubs situated adjacent to Premier Inn hotels could potentially be repurposed into additional room stock.

The decision reflects a perceived shift in focus at Whitbread, moving away from food and beverage brands to prioritise its hotel business. In January, Whitbread divested its stake in the healthy café brand Pure after nine years, stating that the group was 'not a core part' of its strategy.

Whitbread manages over 840 Premier Inn hotels across the UK and also oversees restaurant brands such as Thyme bar and grill and Bar + Block.