JD Wetherspoon to slash 7.5% off food and drink at 900+ pubs

By Daniel Woolfson

- Last updated on GMT

Tim Martin: price cuts will demonstrate potential effect of VAT cut on hospitality sector
Tim Martin: price cuts will demonstrate potential effect of VAT cut on hospitality sector

Related tags: Alcoholic beverage

JD Wetherspoon (JDW) chairman Tim Martin will hack 7.5% off all food and drink prices for one day across his 900+ pub estate later this year to demonstrate the effect a VAT cut could have on the hospitality industry. 

JDW has joined forces with the Association of Licensed Multiple Retailers (ALMR) and British Beer & Pub Association (BBPA) in urging pub operators to show their support for VAT cut on Tax Equality Day, which will take place on 20 September 2017.

Martin said: “Pubs suffer a huge disadvantage, paying about 16p in business rates per pint versus about 2p for supermarkets. In addition, there is a huge VAT inequality and unfairness.

“A reduction in the level of VAT on a long-term basis will create a level playing field and generate growth and jobs in an important and vital industry – especially in beleaguered high streets."

'Busiest day of the year'

“We’re aiming to make it the busiest day of the entire year in our pubs and would urge other pub and restaurant operators to participate too.”

Pubs and restaurants current pay VAT of 20% on all food served, while supermarkets pay zero VAT on a vast range of food products.

ALMR chief executive Kate Nicholls said: “Pubs and restaurants are paying around a third of their turnover in tax compared to a fifth for big supermarkets, and a cut in the rate of VAT would help address this unfairness and allow pubs and restaurants to invest in their businesses, their teams and their communities.

“Our latest research shows that a cut in VAT would give the average adult £500 more in disposable income, giving hard-pressed households a breathing space as well as a boost to consumer spending that could be worth £19bn to the UK economy.

“Two thirds of customers have said that they would spend more if VAT was lower and just over half said they would spend more on eating and drinking out."

VAT cut will 'level playing field'

Nicholls continued: “As business rates and rising inflation continue to squeeze the sector, a cut in VAT not only levels the playing fields in terms of fairness, it is also a simple way to help boost a vital engine of economic growth.”

BBPA chief executive Brigid Simmons added: “Even a small drop in the VAT rate for eating out to 15% would create 78,000 jobs and would be a big boost for the economy. I hope pubs will get behind the campaign.”

Tim Martin has been a long-standing critic of the UK Government’s tax regime. He warned last month that pubs could be destined for ‘further decline’​ if they were forced to shoulder increased business rates as well as tax disparity.

He blasted Chancellor Philip Hammond’s Budget last week as a ‘Budget for dinner parties’ as he revealed JDW now faced £20m in post-Budget cost hikes.

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