Wetherspoon 'cautiously optimistic' after sales jump over Christmas

Wetherspoon  A worker serves a beer at The Holland Tringham Wetherspoons pub after it reopened following the outbreak of the coronavirus disease (COVID-19), in London, Britain July 4, 2020. REUTERS/Hannah McKay
Wetherspoon said like-for-like sales surged by nearly 18% over the last three months of 2022. Photo: Hannah McKay/Reuters

JD Wetherspoon (JDW.L) sales soared after a particularly strong Christmas, but remain below pre-pandemic levels as the pub chain remains "cautiously optimistic" about the financial year.

The FTSE 250-listed (^FTMC) firm, which runs 844 pubs in the UK and Ireland, said like-for-like sales surged by nearly 18% over the last three months of 2022, compared with the same period in 2021.

However, sales remained 2% lower than the equivalent pre-pandemic period in 2019.

Costs in the hospitality sector were far higher than before COVID, Wetherspoon stressed, especially for labour, food, energy and maintenance, which has weighed heavily on pub and restaurant groups.

The group’s chairman, Tim Martin, said he felt the biggest threat to the hospitality industry is pubs and restaurants being taxed more, while supermarkets pay no VAT on food sales.

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He said: “Supermarkets pay zero VAT in respect of food sales, whereas pubs and restaurants pay 20%. This tax benefit allows supermarkets to subsidise the selling price of beer.

“We estimate that supermarkets have taken about half of the pub industry’s beer volumes since Wetherspoon started trading in 1979, a process that has likely accelerated following the pandemic.

“Pub industry directors have, in general, failed to campaign for tax equality, which is an important principle of taxation.”

He added that the industry will “inevitably shrink” relative to supermarkets if it does not campaign strongly for tax equality.

In the month of December, Wetherspoon reported a 21.3% uptick in sales compared to 15% for the sector, based on Coffer CGA Business Tracker data, which monitors sales in the hospitality space.

"We are cautiously optimistic about the company's prospects for the financial year," Martin said.

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Wetherspoon’s net debt amounted to £745m ($917m) in late January, although it had managed to shave around £60m off the total reported in early 2020.

It also revealed that it has repaid the government’s large business interruption loans ⁠– given to larger firms losing revenue during COVID ⁠– of £100m, which had been due to mature in August.

Wetherspoon opened two pubs over the second half of 2022 and sold 10, which made the company around £2.9m.

Here is the full list of pubs which have been sold:

  • Harvest Moon, Orpington

  • Alexander Bain, Wick

  • Chapel an Gansblydhen, Bodmin

  • Moon on the Square, Basildon

  • Coal Orchard, Taunton

  • Running Horse, Airside Doncaster Airport

  • Wild Rose, Bootle

  • Edmund Halley, Lee Green

  • The Willow Grove, Southport

  • Postal Order, Worcester

  • North and South Wales Bank, Wrexham

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