Wetherspoon finds the Irish going tough as it rolls back on expansion

Almost exactly a decade ago Ireland’s pint-supping public was preparing for its biggest shock to the system since the smoking ban as British pub group JD Wetherspoon announced its entry to the market with its first acquisition here.

The chain’s aggressive and well-publicised plans to open no less than 30 venues over the next five years were met with no small amount of hand-wringing and existential warnings from the indigenous pub industry. How was it possible, the argument went, for the traditional, family-run Irish pub to compete against a monolith like Wetherspoon and its stable of close to 900 pubs dotted across the UK?

To others the domestic market was primed for a shake-up, particularly on pricing at a time when the economy was mired in recession and some of the bigger players had gone to the wall.

In the end, as many within the industry predicted in quieter moments, the pub chain never got close to its goal of 30 pubs in the Republic. On Wednesday The Irish Times reported that JD Wetherspoon has put its regional portfolio of pubs up for sale with a guide price of €10 million, allowing it to refocus its attention on its core business in Dublin, where it will continue to operate five pubs.

Student accommodation: A market plagued by bed shortages, rising rents and 51-week leases

---

An attempt to buy the next election with a giveaway budget would be a gross miscalculation

---

The outlook for interest rate cuts is changing - so should Irish borrowers be worried?

---

If not quite a full-blown retreat, it is a significant operational decision for the London-listed company, which turned a profit in the 12 months to the end of July for the first time since the pandemic. So what happened?

In a statement, a spokesman for JD Wetherspoon said: “The pandemic clearly had a big effect on the hospitality industry and no one has been immune. We’ve decided, in Ireland, to concentrate on Dublin and Belfast, and intend to review the situation in a year or two, when profits are back to pre-pandemic levels.”

He said the pubs were being sold as going concerns and the hope was there would be employment opportunities for all staff once the properties were under new ownership.

But there is more to the story, according to industry watchers. Even as its bombastic chief executive and founder Tim Martin was setting out his plans for Irish domination in the early part of the last decade, there was already a sense that it might have come too late.

In 2013 the group acquired its first premises, then trading as the Tonic Public House in Blackrock, Co Dublin, for a reported €1.5 million from AIB, transforming it into the Three Tun Tavern. If the pricetag seems almost quaint in this day and age – the pub was sold to a consortium of Irish rugby players and publican Noel Anderson for around €2.5 million in 2021 – it reflects the state of a market that was pretty much at its post-2008 nadir.

With property values and deal sizes beginning to rebound from 2014 onwards, JD Wetherspoon was suddenly facing a steeper price tag for its ambitious plans.

The group followed up its Blackrock outing with the acquisition of the Forty Foot pub in 2014, reportedly spending almost €4 million buying and refurbishing the Dún Laoghaire venue. Three more Dublin sites were added to the stable in quick succession, including a former church on Abbey Street for which JD Wetherspoon paid close to €1.5 million, more than triple the €400,000 guide price.

After that the group cast its gaze beyond the Pale, opening its first pub outside of Dublin, the Linen Weaver in Cork City, in 2015, pumping €3.75 million into the acquisition and revamp. It along with the An Geata Arundel on Arundel Square in Waterford, The Tullow Gate on Tullow Street in Carlow and the former Carbon Night Club on Eglington Street in Galway, which has yet to open, comprise the portfolio that JD Wetherspoon is now selling.

A quick canvas of people in the trade suggests it is no secret why these pubs are now being hived off from their Dublin counterparts for sale. For one the capital is a bigger market, both in terms of tourists and locals, and can accommodate a more diverse range of pubs, price points and concepts.

Outside Dublin the situation is a bit different. Broadly speaking the JD Wetherspoon model was always going to be a somewhat awkward fit, particularly in a place like Cork City where the most popular pubs are so well established.

There is also something more fundamental at play, according to some. One of the most frequent complaints about Wetherspoon pubs is that they lack the personal touch.

“The Irish pub is based on the boss-ownership model,” said one veteran publican. “It’s a personality thing. People want to know who is in charge.”

“Irish people expect to know the staff,” said another pub industry figure. “And in turn they expect to be known. They want the staff to know what they’re drinking. You don’t get that elsewhere. You just can’t beat the Irish family-run pub.”

If this sounds like mythmaking, it is. Demonstrably Irish punters are willing to tolerate all manner of pubs, particularly when the prices are agreeable. Nor are identikit concepts particularly alien to the market here. Moreover, JD Wetherspoon’s Irish venues were and are far from the cut-rate dives that some would paint them as and the group has poured money into their appearance.

Still, there is a certain “magic” to the Irish pub, said one industry source, that the UK group has never managed to capture.

Perhaps more pertinently JD Wetherspoon has been facing the same headwinds as all other operators in a tough market, particularly now against the backdrop of elevated prices, labour shortages and an assortment of related challenges. Even in the UK the group has struggled mightily to maintain its reputation for value, something the industry complains is even more difficult in the Republic given the relatively high rate of excise duty and VAT levied against the price of a pint.

JD Wetherspoon’s regional retreat goes to show that even the biggest players have to fight to keep their heads above water in the current climate. “It shows the challenges of the on-trade,” said Pat Rigney, co-founder of the Shed Distillery in Co Leitrim. “It also shows we need to support the Irish pub because it is so important to the community and the economy as well.”