Whitbread, the owner of Premier Inn, has announced plans to close its remaining 106 Beefeater restaurants, saying rising costs have fundamentally changed the economics of operating large restaurant sites.
The decision forms part of the company's long-term strategy to focus on its hotel business and follows a review of its restaurant estate across the UK.
In announcing the closures, Whitbread said the hospitality industry had been affected by significant increases in operating costs.
Chief Executive Dominic Paul said:
"In light of significant cost increases impacting the hospitality sector, including those announced in last autumn's Budget, we have undertaken a comprehensive review of our UK restaurant estate."
Whitbread said the review concluded that continuing to operate many of its restaurant sites was no longer commercially viable.
The company specifically referred to a number of increased employment and operating costs, including:
- Higher employer National Insurance contributions.
- Increases to the National Living Wage.
- Changes affecting business rates.
- Wider inflationary pressures across the hospitality sector.
Whitbread said it intends to redevelop many of the affected sites into additional Premier Inn bedrooms, reflecting what it described as stronger long-term demand for hotel accommodation.
The company expects around 3,800 jobs to be affected by the closures, although it has said many employees will be offered alternative roles elsewhere within the business where possible.
The announcement follows similar warnings from hospitality businesses over the impact of rising employment costs introduced following the Government's Autumn Budget.
While Whitbread did not directly attribute the closures to Government policy alone, the company identified measures announced in the Budget as a significant factor contributing to rising operating costs alongside broader pressures facing the hospitality industry.
The closure programme is expected to take place over the coming years as Whitbread restructures its UK estate