Wetherspoon costs rise as growth slows

JD WETHERSPOON has said it is facing substantially higher costs and slower sales growth across the company.

The pub chain’s like-for-like sales fell 1.1pc in the five weeks to Nov 6 compared with pre-pandemic trading in 2019, having risen by 1.5pc in the previous nine weeks.

Compared with a year ago, sales rose 10.1pc in the first nine weeks of its financial year and were 8.9pc higher in the past five weeks. It said trading was broadly in line with its expectations but that October had been a slower month.

“Costs, especially in respect of labour, food and repairs, were substantially higher” in the first quarter, the group added.

Shares in the company fell 3pc in early trading yesterday.

Tim Martin, Wetherspoon chairman, said the company remains cautiously optimistic despite the cost pressures hammering the hospitality sector.

He said he previously set out “various threats to the hospitality industry and these continue to apply”.

“Those caveats aside, in the absence of further lockdowns or restrictions, the company remains cautiously optimistic about future prospects,” he said.

Pubs have been knocked by a cocktail of cost increases as inflation sends prices soaring, staff demanding higher wages and waning demand among cash-strapped pubgoers.

Mr Martin warned last month that the group is facing a challenge to persuade customers back into its bars after they got used to drinking cheap supermarket beer during the pandemic.

It came as the company said last month that sales rose from £773m to more than £1.7bn in the year to the end of July, but were still behind the more than £1.8bn the company made in 2019.

Wetherspoon cut annual underlying pre-tax losses from £167m to just £30.4m, though it made a profit of £132m before the pandemic struck.