MCA city news

Towns 'not able to cope with two JDWs'

By James Wallin, MCA

- Last updated on GMT

Towns 'not able to cope with two JDWs'

Related tags: Marketing

JD Wetherspoon founder and chairman, Tim Martin, has told MCA the company’s refusal to segment its offer is limiting its growth potential.

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Martin recently said he now sees the potential to add no more than 250 pubs to its existing 950-strong estate, having previously indicated that 1,600 was a target.

He told MCA: “I suppose we have found, in a number of places, we can have a pub in an area with 30,000 people and do very well but it doesn’t necessarily follow that we can have two pubs in a town of 60,000 people. That’s what’s making us reflect.”

The chain put a 50-strong package of pubs on the market last year, marketed through CBRE, with the majority thought to now be sold or under offer.

Martin said: “For the most part, the pubs we put on the market have been fairly close to another Wetherspoon pub. In the aftermath of the credit crunch especially, where we had extremely high-performing pubs we got the opportunity to acquire another pub at a low price so we opened a second close to the first.

“Given that we are essentially a one-trick pony, in that we don’t have 10 types of pubs, having two close to each other didn’t work out as planned. That has made us think again about how many pubs we can open in a certain area.”

On the key focus for the company this year, he said: “There’s been a good increase in sales at breakfast and coffee.

“Anyone looking at our accounts would say — yes, but there hasn’t been much profit growth from it. That’s an area we’re hopeful we
can get further sales increases and some profit from in the future.”

He said the introduction of the national living wage had increased the price differential between supermarkets and pubs, adding: “Combined with the tax it’s unfair and needs to be sorted out.”

The company has bought back a significant number of its own shares in recent years but Martin insisted he could not see JDW de-listing. He said: “In spite of issues in the quoted area, it’s quite a good place for a company like Wetherspoon to be.”

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Related topics: JD Wetherspoon

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