Wetherspoons reports record sales and profits, and warns of pricier pints
Wetherspoons has reported record annual sales and profits, but warned that prices and costs are likely to rise in the coming months. The pub chain led by Tim Martin said like-for-like sales, which exclude new pubs, rose 5% in the year to 29 July.
Although sales were up 5.5% in the first six weeks of the company’s new financial year, it said taxes, labour and interest costs were expected to be higher than last year. That meant the price of its food and drinks “may have to go up a bit”, Mr Martin told the BBC.
Wetherspoons is famous for its rock-bottom prices and no-frills pubs, which do not play music and only show a limited amount of televised sports to keep overheads as low as possible.
Failing to show the World Cup over the summer meant the chain missed out on a sales boost enjoyed by rival chains such as Greene King, said Neil Wilson at Markets.com.
“Growth cooled off over the hot summer – full year sales growth came in at 5% on a like-for-like basis, slower than the 5.2% registered in the nine months to the start of July,” he added.
“There was clearly an impact from the hot weather as Wetherspoons pubs tend to lack the outdoor spaces customers seek when it’s sunny.”
However, Mr Wilson added: “Underlying sales growth is very strong and investors should not be distracted by the short-term seasonal effects.”
Shares fell 0.2% to £12.77 on Friday – lower than the 2018 peak of £13.25 and valuing the company at about £1.3bn.
Mr Martin said Wetherspoons would be opening fewer pubs and admitted it may have added too many second or third outlets in some towns in recent years. The chain has about 900 pubs in the UK.
The prominent Brexit supporter said he hoped Britain left the European Union without an agreement: “A deal is a bad thing – if we don’t have a deal and embrace free trade, prices will go down in the shops.
“We will be in a much stronger position on a free trade basis that some people call a ‘no deal’,” Mr Martin added.
In June, the chain said it would stop selling champagne and prosecco and replace them with non-European Union sparkling wines. The Wetherspoons founder also believed the UK would need a “considerable level of immigration” in the coming decades.
“Although I believe in Brexit, I think the UK’s got quite a low birth rate and that we need a gradually rising population, and that we will need a considerable level of immigration over the next 10, 20, 30 years to be a successful economy,” Mr Martin said.
“Having said that, I think that uncontrolled immigration EU-style is not a good thing.”