• Text size      
  • Send this article to a friend
  • Print this article

JD Wetherspoon reports festive sales rise

JD Wetherspoon is toasting another surge in Christmas sales - a day after it controversially opened its latest pub at a motorway services station.

Like-for-like sales for the 12 weeks to January 19 were up 6.7% while they were 5.2% ahead over the 25-week period to that date.

However the group warned that operating margins will be squeezed for the first half of the financial year due to increased investment, including in training, IT and staff. Corporation tax is also expected to be slightly higher for the full year.

The trading update comes a day after the chain opened the Hope and Champion pub at the M40 services at Beaconsfield, Buckinghamshire.

Alcohol campaigners and doctors have raised concerns about the move but Wetherspoons says it expects customers will act responsibly, and the majority will be drinking non-alcoholic beverages.

The chain, which has more than 800 pubs, has opened 18 new sites so far this financial year and has 11 under development. It expects to open 40 to 50 in the 12-month period.

In its outlook, the company again drew attention to the "unequal and unfair" VAT and business rates burden faced by pubs, meaning they pay far higher taxes than supermarkets do, widening price differences and forcing thousands to close.

But while there was pressure on its margins, the group said: "Assuming reasonable sales growth, the company is targeting a reasonable outcome for the current financial year."

Shore Capital analyst Greg Johnson said the performance to date was significantly ahead of expectations though the margin performance "continues to frustrate".

Investec's James Hollins said the programme of pub openings combined with the success in driving sales added to confidence about the prospects of "strong returns in an improving UK consumer environment".

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

207466