Wetherspoon's raises openings target

By John Harrington

- Last updated on GMT

Related tags: Alcoholic beverage, Jd wetherspoon

Wetherspoons pub openings
JD Wetherspoon, the managed pub operator, has increased its full-year openings target to between 40 to 50 as it reported a 3.7% rise in like-for-like sales in the 13 weeks to 27 October, with a slight dip in operating margin.

Operating margin was 8.3%, c0.3% lower than the same period in the last financial year, “mainly due to increased labour, repairs, marketing and central overheads”.

“The company believes that this increased expenditure will benefit the future performance of the business. The margin in the quarter is a possible indicator for this financial year, assuming we achieve reasonable sales growth.”

Total sales in the period grew 7.6%.

Acquisition​s

The company opened eight new pubs in the quarter and said it has 12 more under development.

“We now anticipate opening 40 to 50 pubs in total this year, slightly more than previously anticipated, helped by our increased bank facility and a number of recent acquisitions.”

Regarding its outlook, the company said: “As previously indicated, the biggest danger to the pub industry is the VAT disparity between supermarkets and pubs. Since supermarkets pay almost no VAT in respect of food sales, whereas pubs pay 20%, supermarkets are able to subsidise their drinks’ prices to the detriment of pubs, around 10,000 of which have closed in the last decade.

“It does not make economic or social sense for the government to favour powerful supermarkets with what amounts to a “tax break”, especially since pubs generate so many more jobs, and so much more tax, per pint or meal, than supermarkets.

“In spite of the continued pressure from costs and taxes, the company remains confident of a reasonable outcome for the current financial year.”

Related topics: JD Wetherspoon

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