Whitbread has announced plans to overhaul its restaurant business, putting around 3,800 jobs at risk across the UK and Ireland.
The company, which owns Premier Inn, will convert all 197 of its remaining branded restaurants into hotel‑based food and drink services as part of a wider reset of its five‑year business strategy.
Plans were confirmed on April 30 as the group seeks to improve profitability and streamline operations.
The restructuring follows increased costs linked to recent fiscal changes in the UK, with rising property taxes adding to financial pressures.
A photo of a Premier Inn hotel in Clacton
| PREMIER INNActivist investor Corvex Management had also urged the company in December to review its strategy.
Whitbread had already begun converting some underperforming restaurant sites into additional hotel rooms before expanding the programme.
The hospitality sector has faced weaker consumer demand alongside rising operating costs, while higher energy prices linked to tensions in the Middle East are expected to add further pressure.
Whitbread said the transition would reduce adjusted pre‑tax profits by £10million in the current financial year, with site conversions expected to take place during the second half of the 2027 financial year.
As part of its plans, the company intends to raise funds through a property sale‑and‑leaseback programme, aiming to sell and lease back around £1.5billion of property assets.
It also plans to cut net capital expenditure by more than £1billion over the next five years.
Around half of Whitbread’s estate is currently held as freehold property, a proportion that will fall to between 30 and 40 per cent under the new strategy.
Whitbread said the measures are designed to support future growth while addressing rising costs, forming part of a broader effort to strengthen returns and adapt to challenging trading conditions.
Whitbread has announced plans to cut around 3,800 jobs in the UK and Ireland as part of a new five-year strategy to reduce costs
|GETTY
Chief executive Dominic Paul said: “We always challenge ourselves to improve and, in light of significant cost increases in the form of business rates and national insurance, as well as the implied market discount to our inherent value, we’ve looked hard at the options open to us to maximise value creation over the medium and long-term.
“This has been a rigorous process and we’ve approached all options with an open mind.
“Our new five-year plan builds on our strengths and drives a significant acceleration of our strategy.”
The latest restructuring follows earlier cuts announced by Whitbread, when the company confirmed plans to close more than 200 branded restaurants and cut around 1,500 jobs as part of a separate cost‑saving programme.
At the time, the group said weaker demand in the wider pub and casual dining market had left several sites loss‑making, prompting a shift towards expanding its hotel estate.
Whitbread has previously argued that converting underperforming restaurants into additional Premier Inn rooms offers stronger returns and supports long‑term growth.