Popular Bispham Beefeater pub faces axe as parent company Whitbread reveals cost-cutting campaign

A popular eatery is facing the axe after Beefeater announced they are to close all their restaurants as part of a cost-cutting campaign.

The Red Lion at Bispham is one of 197 restaurants to close, as its parent company Whitbread blamed tax rises and increasing cost for the loss of around 3,800 jobs as part of a new five-year strategy to make £250 million in cost savings.

The new five-year plan includes the increased cost-saving target and steps to cut capital spending by more than £1 billion, which will see it sell off £1.5 billon worth of its freehold properties – meaning the hotels it owns outright – to “fund future growth and increasingly look to grow on a leasehold basis”.

Whitbread, which owns restaurant chains including Beefeater, Bar + Block, and Brewers Fayre, will be replacing its 197 restaurants with an integrated food and drink model which it said was more efficient and preferred by hotel guests. At the moment, there is no news on the future of the Devonshire Road restaurant.

Plunging profits

Whitbread’s profits have dipped by more than 19 per cent to £298m, sparking the five year survival plan. The firm aims to sell off 110 sites and convert others into 600 new hotel rooms in a bid to save a quarter of a billion pounds.

Whitbread said the plans to reduce its 30,000-strong workforce were subject to employee consultation, and that it expects to retain a significant proportion of those affected through redeployment.

The company’s previous restructuring plan, launched in 2024, resulted in around 1,500 job cuts. It is still planning to increase the number of hotel rooms it has open to 96,000 by the 2031 financial year, from the current of approximately 86,600.

‘Returns for our shareholders’

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. This plan will transform Whitbread into a higher-margin, higher-returning pure-play hotel business.

“We’re going to go further and faster to deliver a great experience for our guests and high-quality growth and returns for our shareholders.”

It comes after the business reported a pre-tax profit of £298 million for the year to February 26, which was 19% lower than the year before. Total revenues were flat year-on-year at £2.9 billion, but UK sales edged up by 1%.