Wetherspoon boss tempers expectations for the rest of the year amid Budget uncertainty

Concerns around the upcoming Budget has prompted the boss of Wetherspoon to take a “slightly more cautious” stance on the pub group’s outlook for the rest of the year.  

Chancellor Rachel Reeves will be delivering the Budget on 26 November and earlier this week refused to rule out tax rises in a speech to Downing Street.  

In its latest trading update, Wetherspoon chairman Tim Martin said: "The company is pleased with the continued sales momentum but is mindful of the chancellor’s Budget statement later this month and, as a result, is slightly more cautious in its outlook for the remainder of the year."

Like-for-like sales in the first 14 weeks of the financial year were 3.7% higher than the same period last year, where bar sales increased by 5.7% and hotel room sales decreased by 6.3%.

In the year to date, Wetherspoon posted a 4.2% increase in total sales and opened four pubs in Kenilworth (Warwickshire), Paddington Basin (London), London Bridge Station and Basildon (Essex).

During the period, Wetherspoon expanded its franchise business, with 11 pubs now operating as Wetherspoon franchises, including five run by Haven Holiday Parks, two by university student unions and two by Papas, a family-owned group of 20 restaurants, founded in 1966.

The company said it was planning an additional 12 franchised openings in the current financial year.

Martin continued to advocate for legislative change to address the tax imbalance between supermarkets and hospitality, especially amid reports the National Minimum Wage will rise again next April.

He said the ex-VAT sales price of a beer is about £1.50 per pint in a pub, whereas it can be as cheap as £0.15 per pint in retail outlets.

He added: “It can be seen that a 10% wage rise will increase the cost of a pint by about 15 pence in a pub versus about 1.5 pence in a supermarket. Increased labour costs are, consequently, dramatically widening the pricing differential between pubs and supermarkets, to the anger and consternation of customers. 

“A further widening of the differential results from pubs paying 20% VAT on food sales, whereas supermarkets pay nothing.

"As investment bank Morgan Stanley pointed out in recent research, pubs have lost 50% of their beer volumes to supermarkets since the year 2000 – price is surely the main culprit.”

JD Wetherspoon operates more than 800 pubs and hotels across the UK and Ireland.

Photo: Hospitality Media