JDW set to open 500 Lloyd's No.1

Pub retailer JD Wetherspoon says it will take its Lloyds No.1 offering to 500 outlets over the next 10 years.

Since the managed house operator bought the chain from Wolverhampton & Dudley Breweries three years ago, it has grown the brand from 10 to 21 outlets and taken average sales from £11,000 to £26,000.

It says it is now in a position to roll-out the brand to a massive scale of 500 units throughout the UK.

The company will use its strong property pipeline, which currently holds 361 sites, plus the buying power and systems it has in place, to support the expansion.

Opinion over the company's ability to achieve such prolific expansion of a second brand was mixed, but one analyst said: "The company could do this standing on its head. It has doubled Lloyds profits and has the ability and structures in place to deliver. This will have a heavy impact on the high street - competitors will have to cut prices."

Executive chairman Tim Martin made the bullish statement as his company announced half-year profits up 22 per cent to £24.9m on sales of £285.2m, up by more than a quarter from £226.7m.

Like-for-like sales at pubs more than two years old were up 5.5 per cent. The pub had 556 pubs at the end of the half-year and will have opened 80 by the year end. This looked like a slowdown but the company said it was now opening bigger sites with higher takings.

Operating margins retreated slightly, mainly because of increased wages. Mr Martin said his bar staff rates were 25 per cent above the competition and kitchen staff, 30 per cent.

Forecasts for full-year profits were trimmed to £53m.