Wetherspoons: UK pub chain returns to profits in post-pandemic sales recovery
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Wetherspoons, the UK pub chain which suffered a sales slump during the pandemic, has swung back to a significant profit as higher food sales helped its post-pandemic sales recovery continue. The value pub and hotel chain appears more attractive as budgets continue to be squeezed by the effects of the cost of living crisis, according to analysts.
JD Wetherspoon, which runs 826 pubs across the UK, saw total sales rise by 10.6% to £1.92 billion for the year to July 30. Wetherspoons said like-for-like sales grew by 12.7% year-on-year, as it benefited from a significant rise in food sales, which increased by 17.7%.
Meanwhile, bar sales increased by 9%, its hotel business witnessed an 11.8% rise and there was a 26.4% increase in sales through slot and fruit machines. Bosses at the business said sales growth has continued in recent weeks, with like-for-like sales increasing by 9.9% over the nine weeks to October 1.
Tim Martin, chairman of JD Wetherspoon, said: “Wetherspoon continues to perform well. The company currently anticipates a reasonable outcome for the financial year, subject to our future sales performance.”
During the year, Wetherspoon slightly trimmed its pub estate, as it sold, closed or terminated the leases of 31 pubs. It said there was a £7 million cash boost after fees as a result. Wetherspoons also opened three pubs.
James Wheatcroft, equity analyst at Jefferies, said: “Momentum continues into the current year. “We argue that Wetherspoons’ low relative price positioning and well-located and well-invested premises will gain market share and benefit from trading down.” Roberta Ciaccia at Investec added that the latest figures were “strong and broadly in line with market expectations”.
Higher operating costs, caused by the cost-of-living crisis, forced a total of 13,000 pubs in England and Wales out of business in the last two years, according to British Beer and Pub Association (BBPA) data. The BBPA has called for an extension of business rates relief to prevent further permanent closures.