Concerns grow for JD Wetherspoon

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Related tags: Jd wetherspoon, Bacardi, The times

Concerns are growing in the City over the strategic direction of JD Wetherspoon, according to The Sunday Times newspaper.A report says that after two...

Concerns are growing in the City over the strategic direction of JD Wetherspoon, according to The Sunday Times newspaper.

A report says that after two decades of non-stop expansion the company's growth has slowed to a point where it is no longer as compelling as a growth stock.

Analysts say that the company is at a crossroads. Greg Feehely of Altium Capital told the newspaper: "The key issue for Wetherspoon is where does it go now."

The group has halved openings and like many other pub companies, it looks set to keep returning cash to shareholders as the tough times continue on the high street.

There are also signs that the company is switching from key market-leading brands to other, perhaps cheaper brands in a bid to halt declining margins.

The company recently switched from Bacardi rum to the lesser known Havana Club, and is also piloting an alternative cola brand to Coca-Cola in 24 pubs.

Tim Martin maintains that JD Wetherspoon can still keep growing to its target of 1,500 pubs, albeit at a slower rate.

And for many, the stock remains a key part of a leisure share portfolio. Geof Collyer of Deutsche Bank said: "It's a mature business and it's now acting like one. Wetherspoon is still the benchmark for everyone else in the sector."

Related topics: JD Wetherspoon

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