British pub chain JD Wetherspoon has recorded a like-for-like sales increase of 6.3 per cent in its first quarter of the year, with total sales up 11.3 per cent.
The sales increase came despite October being a drag on the quarter’s figures, as like-for-like growth decreased over the month.
JD Wetherspoon founder and chairman Tim Martin told City A.M. that Britain’s Indian summer this year played a strong role in the sales numbers: “We had exceptionally good weather in August and September, and when reality dawned in October, I think there was a natural slowdown.”
There was less good news for the low-cost pub proprietor’s operating margin, which was down to 7.7 per cent from 8.3 per cent in the same period last year.
The company pointed towards increased supplier costs, a four per cent utility costs increase and a five per cent pay rise for staff in October as reasons for the slump.
Martin said: “Having had record year in the previous year, we decided to push ahead on staff wages a bit. And, certainly in the short term, that will have an impact on margins.”
As a result of the sales slowdown in October, combined with the cost increases, the company said it was anticipating an operating margin in the range of 7.2 per cent to 7.8 per cent for the current financial year.
Martin added: “It was a reasonably good quarter: sales were good and we got a lot of new pubs on site for the future.
“It’s only a short period, so you can’t read to much into it, but a pretty good performance overall.”