Price hikes will be limited despite cost pressures, Wetherspoon’s boss says
The boss of JD Wetherspoon has said the pub group will try to “keep price increases to a minimum” amid pressure from rising labour costs, despite reporting higher sales and profits over the past year.
The company, which operates nearly 800 pubs across the UK, has benefited from trading continuing to improve in recent months.
In revealed it generated revenues totalling £2.13 billion for the year to July 27.
This was 4.5% higher than the year before, while sales on a like-for-like basis – which strips out the impact of pub openings and closures – rose by 5.1%.
This was driven by both bar and food sales growth, while hotel room sales dropped by nearly 12% after deciding to exit from online booking agents in the UK.
Wetherspoon’s said like-for-like sales grew by 3.2% in the first few weeks of the new financial year.
The group ran 794 pubs at the end of the financial year, and plans to open 15 managed pubs and 15 franchised pubs in the year ahead.
Wetherspoon’s chairman Sir Tim Martin said increases to national insurance contributions and wages was adding about £60 million to its yearly costs, while it was also facing an impact from energy costs and new packaging taxes.
“Cost increases such as these will undoubtedly add to underlying inflation in the UK economy, although Wetherspoon, as always, will endeavour to keep price increases to a minimum,” he said.
“The company currently anticipates a reasonable outcome for the financial year, although Government-led cost increases in areas such as energy may have a bearing on the outcome.”
Robyn Duffy, consumer markets senior analyst at RSM UK, said Wetherspoon’s “continues to outperform the wider UK pubs market”.
“Drinks sales remain robust, while the food division continues to broaden its appeal across the day, with all-day breakfasts and other affordable staples proving especially popular,” she said.
“Hotel stays dipped this year, but that hasn’t dented overall performance.
“Crucially, Wetherspoon’s highly competitive pricing continues to underpin its ability to attract cost-conscious consumers.”
Published: by Radio NewsHub
