Major pub chain warns over sales and costs

JD Wetherspoon has warned it will be stung by significantly higher costs in the second half of the year, adding it expects sales to slow.

The pubs group said a combination of higher wages, an additional £7 million bill for business rates, a £2m hit from the Apprenticeship Levy and other “cost increases” meant it remained cautious.

Chairman Tim Martin said: “In view of these additional costs and our expectation that like-for-like sales will be lower in the next six months, the company remains cautious about the second half of the year.”

In the first half, Wetherspoon, with more than 900 UK pubs, said like-forlike sales rose 3.4% and total sales increased by 1.6%.

The firm expects a “slightly improved” trading outcome for the current financial year compared with 2016. It will increase the level of investment in existing pubs from £34m to around £60m.

Brexit-backing Mr Martin previously accused European leaders of taking a “bullying” approach to the UK.

He once again used the company’s trading statement to deliver a diatribe on the state of the nation following the EU referendum.

He said Bank of England chief economist Andy Haldane calling economists’ forecasts a “Michael Fish moment” demonstrated a “deep misunderstanding” of the situation.

“Michael Fish’s predictions were a misinterpretation of data on one evening, under great time pressure,” he said.

“In contrast, the majority of economists, economic institutions, politicians and intellectuals has consistently misunderstood the implications of the euro, its predecessor the exchange rate mechanism, and the implications of leaving the EU, over a period of about 30 years.”

He believed the mutual imposition of World Trade Organisation tariffs would create a “windfall” for the UK.

Shares in Wetherspoon’s closed the day higher yesterday, up 35.5p at 937.5p on the trading session.

Tim Martin expects slower sales in his pubs.