Pub giant JD Wetherspoon is poised to unveil its crucial Christmas trading performance this week, offering a key insight into how consumers behaved during the festive period against a challenging economic backdrop for the hospitality industry.
Festive Figures Under the Spotlight
The company, which operates approximately 800 venues across the UK, will provide its latest trading update to shareholders and analysts on Wednesday 21 January. This report will cover the second quarter of its financial year, encompassing the vital Christmas and New Year period.
Investors will scrutinise the figures to see if increases in the cost of living and pre-budget consumer caution impacted the value-focused chain. The update follows a "slightly more cautious" outlook expressed by the company in November, issued ahead of the government's budget announcement.
How Does Wetherspoon Compare to Rivals?
The market will be keen to compare Wetherspoon's performance against other major pub operators who have already reported. Earlier this week, rivals indicated robust festive trading despite sector-wide pressures.
Mitchells & Butlers (M&B), owner of All Bar One and Toby Carvery, announced like-for-like sales growth of 7.7% over Christmas. Similarly, Fuller's reported an 8.2% increase in like-for-like sales, highlighting particularly strong food sales as customers splurged on festive meals out.
This puts the spotlight firmly on Wetherspoon's food sales performance, which saw subdued growth of just 0.9% in the first 14 weeks of its financial year to 2 November. In that period, total like-for-like sales rose 3.7%, driven by a 5.7% jump in bar sales and an 8.9% surge in slot and fruit machine revenue, though hotel room sales fell by 6.3%.
Sector Pressures and Political Scrutiny
The trading statement is likely to be accompanied by commentary from the company's often-outspoken founder and chairman, Tim Martin, on the current pressures facing pubs. The sector is bracing for significant business rates increases from next year, following higher property valuations used in tax calculations after the autumn budget.
Derren Nathan, head of equity research at Hargreaves Lansdown, noted: "It’s the group’s first steer on numbers since the November budget. Coming into the period, management exercised some caution over the outlook, but industry data suggest Christmas revellers were out in force."
He added: "In recent years, JD Wetherspoon has consistently outperformed the wider pub market and, with sentiment having strengthened since the company last addressed the market, investors look to be expecting more of the same."
There is, however, a potential political reprieve on the horizon. Following criticism of the impending rates hike, the Labour Government is now expected to announce further financial support measures for the industry, which could ease future cost pressures.
