Premier Inn owner Whitbread has outsourced food delivery to logistics company Kuehne & Nagel.

Whitbread, which announced its plans in February alongside the merger of its hotel and restaurant divisions, is ultimately aiming to save itself £25m a year.

The company, which runs Costa, will pay a £35m one-off exceptional cost to cover its restructuring and has also made a handful of redundancies.

As part of the five-year deal with Kuehne & Nagel 340 Whitbread Food Logistics staff are transferring over to the logistics specialist.

Alan Parker, chief executive of Whitbread said there was a “compelling financial case for outsourcing versus retaining in-house food operations”.

Last month Whitbread and Travelodge ended talks about a possible merger, which would have created a budget hotel group with some 800 sites.

Whitbread to combine hotel and restaurant businesses with small job losses >>

Whitbread reports strong performance >>

Costa Coffee opens 1,000th outlet and first in Russia >>

By Gemma Sharkey

E-mail your comments to Gemma Sharkey here.