JD Wetherspoon benefits from ‘Aldi effect' as sales rise

04 November 2008 by
JD Wetherspoon benefits from ‘Aldi effect' as sales rise

JD Wetherspoon has become the latest high-street operator to benefit from the "Aldi effect" as customers trading down helped to boost sales.

The group, which has nearly 700 pubs, today revealed that like-for-like sales increased 1.5% in the 13 weeks to 26 October, an improvement on the 1.1% increase seen in the first five weeks of the period.

Total sales rose 6%, although operating margins were down 1.3% on a year earlier because of increases in operating costs such as staff, food and marketing.

Food sales now account for 29% of business, compared with 17% a decade ago. Including bar purchases made with table meals, food customers generate around two-thirds of all sales and produce weekly food sales per pub of around £8,800.

Wetherspoon believes it sells more meals per pub a week than any other major pub company.

Analyst firm Numis Securities said casual diners were trading down to cheaper options such as Wetherspoon, while Blue Oar Securities said the group was "performing exceptionally well".

In a statement, Wetherspoon said: "Notwithstanding the continued difficult conditions in the wider UK economy, we remain confident of the company's prospects for the financial year ending July 2009."

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By Daniel Thomas

E-mail your comments to Daniel Thomas here.

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