ubs recovering more slowly than hoped from the end of the lockdown, JD Wetherspoon reported today as it headed for losses worse than the city had anticipated.
Sales in the last quarter are down 0.4%, suggesting that the budget cafe chain has suffered from the cost of living as gamblers tighten their belts.
Cocktail sales were up 18.6% from pre-pandemic levels, while sales of ales, lagers and ciders were down 8%. Slot revenues were up 16.6%.
President and founder Tim Martinonce a Tory donor, renewed his attack on the government’s VAT schemes that favor supermarkets, he argues.
He said: “The biggest long-term challenge for the pub sector is the tax differential with supermarkets, which pay zero VAT on the sale of food, while pubs pay 20%. This disparity allows supermarkets to reduce the retail price of beerwine and spirits, at the expense of pubs.
“Supermarkets also pay lower business rates per pint than cafes. A direct consequence is that the share of pubs in beer sales, for example, has fallen from 90% to less than 50% in recent decades.”
Research last week found that there are fewer pubs in England and Wales than there have been for centuries. There are about 40,000 left, 7,000 less than ten years ago.
Matt Britzman of Hargreaves Lansdown said: “The brisk recovery in pub sales that Wetherspoons hoped for has not quite materialized, with sales close to pre-pandemic levels. It seems the older demographic is still cautious about getting out.
Lagers and ales were replaced by spirits and cocktails as sales in lively city locations, with music on weekends, outperformed quieter suburban pubs.
Wetherspoons are likely to make a loss for the year of around £30million. Shares fell 52p to 578p – they have nearly halved in the past year.
AJ Bell financial analyst Danni Hewson said: “Interestingly, there is a contrast to suburban cafe-bar-restaurant operator Loungers. Sales have skyrocketed since mid-April and Loungers says there is no sign of the behavior of the customer changes.”