JD Wetherspoon has announced plans to open up to 25 pubs over the year ahead, as it reported a jump in first-quarter sales. The chain will launch five to 10 managed pubs in the year to next August, adding to the 797 it already operates, while also expanding its current 25-strong franchised estate with another 10 to 15 sites.
The company has already opened six managed pubs in the new financial year so far, located at Manchester Airport, Heathrow Airport, Crewe in Cheshire, Ferndown in Dorset, Dibden Purlieu in Hampshire and Kempston in Bedfordshire. It reported an 8.2% rise in like-for-like sales in the 14 weeks to November 1, with bar sales leading the way with a 9.4% jump and food up 6.8%.
Sales growth eases in recent weeks
Sales growth slowed in the most recent five weeks, easing to 7.5% against the 8.6% surge seen in the first nine weeks of the quarter. Chairman Tim Martin said: “The company has had a good start to the financial year. There are still three quarters to go and profit forecasts are very dependent on the level of sales growth.”
He said the group was “comfortable” with current market expectations for profits of £76.4 million on a 53-week basis. It saw pre-tax profits tumble 28% to £58.6 million for the 52 weeks to July 26 as rising staff and other costs offset rising sales.
Chairman criticises Government policies
Mr Martin used the group’s latest update to criticise policies he said create an uneven playing field for pubs and supermarkets, arguing that recent Government moves to hike labour costs have widened the gap even further. He said calculations estimate the labour cost of a pint at £1.68 in pubs, but about 15 pence in a supermarket.
“This economic effect has widened the price gap between a pub pint and a supermarket pint in recent decades, which has been a major factor in pubs losing half their beer sales to supermarkets since the millennium,” he said. “However, it has also resulted in a substantial decrease in employment,” he added.
“The net effect has been to push up the cost of a pint or a meal in a pub relative to supermarkets- and to reduce the number of jobs in the economy.”
