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Premier Inn winning market share

Whitbread to hike prices to meet cost of Living Wage

Lenny Henry PremierWhitbread is expected to increase hotel room prices and improve productivity in order to meet the added cost of implementing the Living Wage.

The company, which said its Premier Inn chain grew market share, will announce details of how it is to tackle the mandatory pay settlement for the low paid which was unveiled earlier this year by Chancellor George Osborne.

Hospitality workers are among Britain’s lowest earners and the legislation poses a particular challenge to companies such as Whitbread which employs tens of thousands in hotels, restaurants and coffee bars.

“We are continuing to deliver our ambitious organic growth plans with another good quarter, growing total sales by 11.1% and like for like sales by 3.3% for the 11 weeks to 13 August,” said chief executive Andy Harrison in a trading update.

Premier Inn, whose advertising features Lenny Henry (pictured) grew total sales by 11.6% with rooms available growing by 7.9%.

In the regions it delivered sales growth of 9.2%, growing rooms available by 6.2%. This was against strong comparatives such as the Commonwealth Games in Glasgow and the Farnborough Airshow last year.

The restaurants business outperformed a continuing soft pub restaurant market, with like for like sales growth of 0.6%. Costa maintained its rapid growth with worldwide sales growing by 16.2%. Across the UK like-for-like sales growth was good at 4%, against a strong performance last year. 

Mr Harrison said: “We are developing plans to adopt the recently announced National Living Wage. We shall mitigate this substantial cost increase over time with a combination of productivity improvements, boosted by investment in systems and training, efficiency savings and some selective price increases. We shall announce more details of our plans with our Interim Results on 20 October.”

He said the figures keep the company on track to deliver full year expectations and its ambitious growth milestones. This year it plans to open about 5,500 UK rooms, around 220 Costa outlets worldwide and to install 700-800 Costa Express machines.

 

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