The pub behemoth’s latest trading update revealed like-for-like (lfl) sales were 5.1% higher in the 25 weeks to 19 January 2025 than the same period a year ago.
However, following the “below double-digit growth”, business recovery specialist Begbies Traynor said the “mood music” has changed for JDW.
Begbies Traynor partner Julie Palmer said: “After an impressive performance for most of 2024, it seems the mood music has changed at JDW, as it delivered a lacklustre Christmas performance that lagged behind peers and highlights a greater sense of uncertainty as we enter 2025.
“The beloved pub chain still saw strong growth in like-for-like sales over the all-important festive trading period, but this remains below the double-digit growth many peers have reported and may call into question the durability of their well-loved low cost model at a time when other pubs are planning to raise prices to offset the impacts from Labour’s high-tax budget.”
Ride out the storm
Palmer added: “With almost 800 pubs across the UK and Ireland, JDW clearly has the scale to ride out the storm, but the iconic pub chain is not immune to the harsh headwinds facing the hospitality sector, and it must think carefully about its strategy if it is to emerge relatively unscathed from this higher cost environment.”
The update reported bar sales were up by 4.5%, food by 5.6% and slot/fruit machines by 11.7%. However, hotel room sales decreased by 6.5%.
In addition, the update showed lfl sales for the main Christmas period, from 16 December 2024 to 5 January 2025, saw a 6.1% uptick.
Meanwhile total sales were up by 4% in the year to date, attributed to a small number of disposals, the fiscal report added.
The trading update also revealed the interest costs for FY25 were expected to be around £47m, compared with £53m in 2024.
Increasing costs
Debt levels at the end of FY25 was anticipated to be between £680m and £700m (FY24: £660 million).
JDW chairman Tim Martin said while the company was “confident” of a reasonable outcome for the year, forecasting had been made “difficult” by increasing costs.
Martin also repeated pleas for the Government to balance the VAT “distortions” between the on and off-trade, adding VAT distortions would “inevitably create more supermarkets and less pubs”.
Palmer added: “It is little surprise that Martin called upon the Government to level the VAT playing field, though missing among his [statement] was a sense of how JDW will grapple with the [predicted] additional £60m in costs and continue to offer cash strapped customers cheap pints."
