British pubs group JD Wetherspoon warned of lower comparable sales growth and higher costs in the rest of the year as it grapples with a bigger tax bill, increased wages and rising property costs.
The cautious forecast overshadowed a 3.6 per cent rise in revenue to £830.4 million (€940.8 million) and a 6.1 per cent increase in like-for-like sales in the 26 weeks to January 28th. However, in the recent six weeks to March 11th, like-for-like sales growth cooled to 3.8 per cent.
Chairman Tim Martin said growth in comparable sales would be lower in the next six months as it stomachs an array of costs. “The company anticipates higher costs in the second half of the financial year, in areas including pay, taxes and utilities,” he said. “In view of these additional costs, and our expectation that growth in like-for-like sales will be lower in the next six months, the company remains cautious about the second half of the year.”
Wetherspoon said it remained cautious about the second half of the year as it expected higher costs in areas such as pay, taxes and utilities as well as slower growth in like-for-like sales.
Increased costs
Like other operators in the British pub sector, Wetherspoon has been hit by increased costs, mainly due to wage inflation, rising property costs and unfavourable currency exchange rates. However, Wetherspoon said it expected unchanged trading outcome for the current financial year, citing slightly better-than-expected year-to-date sales.
Wetherspoon had reported strong comparable sales for the Christmas period.
Mr Martin apologised to customers over a meat recall earlier this year which saw sirloin, rump and gammon steak pulled from the menu of the chain’s 900 UK and Irish pubs.
Wetherspoon has since cancelled its contract with the now-bust Russell Hume and is sourcing its steaks from new suppliers.
Mr Martin also used the latest trading update to launch fresh criticism aimed at the chairmen of Whitbread and Sainsbury’s, who he accuses of misleading the public by saying that food prices would rise if Britain left the European Union without a deal.
“The EU is a protectionist organisation which imposes high taxes on food, clothing, wine and thousands of other items from non-EU countries,” Mr Martin said in another lengthy tirade that also took in criticism of the Confederation of British Industry and the British Retail Consortium. The Wetherspoon boss has been an outspoken proponent of Britain’s divorce from the EU, issuing countless stock exchange announcements extolling the virtues of Brexit. – Reuters
