HELLO and welcome to the AM Business Briefing, as Premier Inn owner Whitbread has revealed a knock to demand over the festive season from the spread of the Omicron variant and cautioned over rising costs.
The group saw total UK sales drop 4.4% compared with two years ago in the six weeks to January 6, dragged lower by a 17.2% slump in food and drink revenues due to fears over the variant and restrictions on eating out in Scotland, Wales and Northern Ireland.
Lockdown measures in Germany have also taken their toll on its chain in the country, with hotel occupancy levels plunging 36% over the six weeks.
Whitbread said it was too early to tell the impact of the Omicron hit to trade over the full year, with January and February already traditionally the quietest months for the group.
It said it still hopes Premier Inn hotel trading will recover to pre-Covid levels this year, despite the current woes.
The firm also revealed it had delayed about £20 million of investment and marketing project spend this year due to supply chain and trading challenges, while it warned the group's cost inflation is set to hit up to 8% on average.
Around £1.4 billion of its cost base is set to be affected by the price hikes, but the firm said it hopes to "largely" offset the pressures, including by existing cost saving measures.
Alison Brittain, chief executive of Whitbread, said: "UK accommodation sales remained resilient in December, albeit softening as we moved through the month and into the festive period as a result of the onset of the Omicron Covid-19 variant.
"Whilst our hotel performance was excellent, the value pub and restaurant sector in which we operate remains more challenging."
Figures also released for the third quarter to November 25 showed more resilient trading before Omicron struck, with total like-for-like UK sales down 1%.
It said accommodation sales rose 5.5%, while food and drink sales were down 13.4% in the quarter.
All staff made redundant as shopfitting business with Kirkintilloch base collapses
A shopfitting business with operations near Glasgow and in north London has fallen into administration, hit by the coronavirus pandemic and increased labour and material costs, and all staff have been redundant.
Michelle Elliot and Simon Carville-Briggs, partners with FRP Advisory, have been appointed joint administrators of Chas Smith Group Limited, which was founded in 1921.
Stuart Patrick: City can thrive if it meets ‘three grand challenges’
Early in December, the eight local authorities that make up the Glasgow City Region together launched their collective strategy for the biggest urban economy in Scotland.
There is much in the strategy for the business community to welcome and I have been especially impressed by the work of Andrew Robertson and the Regional Intelligence Hub team in gathering, reviewing and presenting the data upon which the plan is based.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here