JD Wetherspoon has said it plans to open up to 25 pubs over the year ahead as it reported an 8.2% jump in first-quarter sales, with Tim Martin saying the chain is comfortable with profit forecasts
Pub chain JD Wetherspoon is expanding its empire after unveiling plans to launch up to 25 new bars over the coming year following a surge in first-quarter sales.
The company is preparing to open between five and 10 managed pubs in the year leading up to next August, boosting its current portfolio of 797, while also boosting its current 25-strong franchised estate with another 10 to 15 sites.
Wetherspoons has already opened six managed pubs in the new financial year – at Manchester Airport, Heathrow Airport, Crewe in Cheshire, Ferndown in Dorset, Dibden Purlieu in Hampshire and Kempston in Bedfordshire.
The firm posted an 8.2% increase in like-for-like sales during the 14 weeks ending November 1, with bar sales driving growth at 9.4% and food up 6.8%.
However, sales growth cooled in the latest five weeks, slowing to 7.5% compared with the 8.6% spike recorded in the opening nine weeks of the quarter.
Chairman Tim Martin commented: “The company has had a good start to the financial year. There are still three quarters to go and profit forecasts are very dependent on the level of sales growth.”
However, he noted the group was “comfortable” with current market expectations for profits of £76.4 million on a 53-week basis.
The company experienced a 28% plunge in pre-tax profits to £58.6 million for the 52 weeks ending July 26, as escalating staff and operational costs overshadowed rising sales.
Mr Martin used the company’s latest update to launch an attack on policies he claimed create an uneven playing field between pubs and supermarkets, stating that analysis reveals recent Government decisions to increase labour costs have widened the gap even further.
He revealed that calculations put the labour cost of a pint at £1.68 in pubs, compared to just 15 pence in a supermarket.
He said: “This economic effect has widened the price gap between a pub pint and a supermarket pint in recent decades, which has been a major factor in pubs losing half their beer sales to supermarkets since the millennium.
“However, it has also resulted in a substantial decrease in employment. The net effect has been to push up the cost of a pint or a meal in a pub relative to supermarkets- and to reduce the number of jobs in the economy.”
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