Wetherspoon faces ‘crucial challenge’ to persuade pubers to return to its bars

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Tim Martin has revealed that while his company has cut losses significantly, it has still failed to return to profit since the pandemic, and sales remain lower than in 2019.

“During the lockdown, dyed-in-the-wool pub goers, many for the first time, filled their fridges with supermarket beer – and it proved to be a considerable challenge to persuade them to return to the environment more saloon bar,” he said on Friday.

Total sales rose from £773million to over £1.7billion in the year to the end of July, the company revealed in a statement to investors and the City.

But sales were still lower than the more than £1.8 billion the company made in 2019.

The same story could be seen on pre-tax losses, which have been reduced from £167m before exceptional items last year, to just £30.4m this year. Before the pandemic, the company had made a profit of £132million.

It opened seven new pubs during the year and sold, closed or ended the leases of 15 others. As of July, the company operated 852 pubs on its domain, it said in the statement.

“The company has improved its outlook in several ways in recent years: we have an increasing percentage of freehold properties; the balance sheet has been strengthened; interest rates have been set at low levels until 2031; we have a large contingent of long-serving pub staff and underlying sales are improving,” Mr Martin said.

Wetherspoon faces “a capital challenge” in persuading pub-goers to return to its bars after becoming accustomed to drinking cheap supermarket beer during the pandemic, the company boss has said.

But he warned that the company faces rising costs.

“However, due to previously reported increases in labor and repair costs and the potentially negative effects of rising interest rates and energy costs on the economy, it is difficult to make any firm forecast,” he said.

Commenting on JD Wetherspoon’s annual results, Julie Palmer, partner at Begbies Traynor, which has an office in Leeds, said: ‘It hasn’t been an easy task for publicans lately and Wetherspoons are no exception. Sales are down, the group suffered a loss of £30m and there is still no dividend.

“Unlike many, Tim Martin and his team were able to fix energy costs before prices spiked and the pub chain has long-term contracts with many of its suppliers behind the plethora of beers and pub classics on the menu. , so cost increases could be quite mixed next year.

“Despite this, the pub company employs over 40,000 people and labor costs are only going in one direction,” Ms Palmer said on Friday.

“Add to that a record crisis in consumer confidence and the future is not particularly rosy for the sector.

She added: “JD Wetherspoon’s approach of stacking and selling at low prices should be a clear winner as consumers tighten their belts, but prices will undoubtedly have to rise and this will undoubtedly affect demand, but they are well positioned to weather the storm. with a loyal following and the ability to sell other high-value sites.”

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