Wetherspoon signals hope for a ‘return to relative normality’ next year

JD Wetherspoon has declared that it expects to break even this year and signalled it is “cautiously optimistic” about a “return to relative normality” in 2023.

But the pub giant, which has around 70 outlets in Scotland, underlined the inflationary pressures facing the hospitality industry, with chairman Tim Martin citing the rising cost of labour, energy and food in a thirdquarter trading update.

Wetherspoon reported that likefor-like sales for the 13 weeks to April 24 were four per cent lower than in the same period in 2019, prior to the pandemic, though said that sales have slowly improved since Covid restrictions were eased earlier this year, following the outbreak of the Omicron variant.

After telling the City in its interim statement in March that like-for-like sales had improved to -2.6% in the three weeks to March 13, it said the improvement continued in the following six weeks, to -1.6%. Likefor-like sales moved into “slightly positive” territory in the two weeks to April 24. Mr Martin said: “Since Covid restrictions ended, sales have improved, as previously reported. As many hospitality companies have indicated, there is considerable pressure on costs, especially in respect of labour, food and energy. Repairs are also running at a higher rate than before the pandemic.

“The company anticipates a continuing slow improvement in sales, in the absence of further restrictions, and anticipates a “break-even” outcome for profits in the current financial year.

“Since 13 March, the company has returned to profitability and to a positive cash flow, and is cautiously optimistic about the prospect of a return to relative normality in FY23.”

Mr Martin reiterated that the prospect of further lockdowns and restrictions because of Covid remains the “biggest threat to companies in the hospitality, tourism and related sectors”.

He added: “Many people, including those in the government and the medical establishment, believe that the UK response to Covid... was a success. This view is called into question by the outcome in Sweden... which did not lock down – and which appears to have had better health results. The collateral damage from lockdowns has yet to be quantified, but the economic cost, approximately half a trillion pounds, financed largely by “money printing” by the Bank of England, is a direct cause of the current inflationary crisis.”