Whitbread gears up to take on resurgent competition

WHITBREAD, Britain’s biggest hotel and coffee shop operator, said it was preparing for more competitive markets in 2013 as two of its rivals, Travelodge and Starbucks, shake off setbacks.

The company said it would meet annual profit forecasts even though heavy snow in January had slowed like-for-like sales growth in its fourth quarter to 2.7%, hitting its restaurant business in particular. That was down from a rise of 3.3% across the group in the third quarter.

Whitbread has performed strongly through the economic turndown as customers trade down to its affordable Premier Inn hotel rooms and flock to its ever-expanding Costa Coffee houses. Total sales rose 14.8% in the 50 weeks to February 14.

By contrast, Starbucks has struggled to overcome allegations of tax avoidance which emerged in October and Travelodge, the UK’s number two budget hotel firm, had difficulty finding cash for refurbishment.

Both are now overcoming those problems, and Travelodge has embarked on major expansion after restructuring.

Whitbread chief executive Andy Harrison said it would counter competition by focusing on offering good service to its 21 million monthly customers.

Whitbread, which runs the Beefeater and Brewers Fayre pub chains, has also joined a growing number of firms caught in the horsemeat scandal spreading across Europe.

It said it had found no more contamination, had a new supplier of beef burgers and was planning a new system to track ingredients “from field to fork”.