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Commercial Property News
Wetherspoon profits down 11% as pubs struggle
Pubs group JD Wetherspoon reported an 11% decline in full-year pretax profit today as the smoking ban and slowdown in consumer spending impacted sales.
The group, which has nearly 700 pubs in Britain, made an adjusted pretax profit of £55 million in the year to July 27, in line with market expectations.
Britain's pubs have been hit hard by last year's smoking ban, rising costs, declining consumer spending, and cheap alcohol offers in supermarkets, with the difficult trading environment exacerbated by poor summer weather.
Since the smoking ban came into force on July 1 last year, Wetherspoon has seen strong growth in food sales and a decline in bar sales. Nearly a third of revenues now come from food, with a further third coming from drinks ordered alongside food.
Total sales increased by 2.1% to £907.5 million during the year. Like-for-like food sales rose by 7.9%, while comparable bar sales were down 4.3%, resulting in an overall like-for-like sales decline of 1.1%.
In the five weeks to Aug. 31, like-for-like sales increased by 1.1%.
Chairman and founder Tim Martin said that, in common with many pub and restaurant businesses, the company is expecting a considerable increase in energy, food, labour, and tax costs in the current year.
He said Wetherspoon will need a like-for-like sales increase of about 3% this year to offset that.
The group, which has nearly 700 pubs in Britain, made an adjusted pretax profit of £55 million in the year to July 27, in line with market expectations.
Britain's pubs have been hit hard by last year's smoking ban, rising costs, declining consumer spending, and cheap alcohol offers in supermarkets, with the difficult trading environment exacerbated by poor summer weather.
Since the smoking ban came into force on July 1 last year, Wetherspoon has seen strong growth in food sales and a decline in bar sales. Nearly a third of revenues now come from food, with a further third coming from drinks ordered alongside food.
Total sales increased by 2.1% to £907.5 million during the year. Like-for-like food sales rose by 7.9%, while comparable bar sales were down 4.3%, resulting in an overall like-for-like sales decline of 1.1%.
In the five weeks to Aug. 31, like-for-like sales increased by 1.1%.
Chairman and founder Tim Martin said that, in common with many pub and restaurant businesses, the company is expecting a considerable increase in energy, food, labour, and tax costs in the current year.
He said Wetherspoon will need a like-for-like sales increase of about 3% this year to offset that.
Fri, 5th Sep 2008