Wetherspoon margins hit by VAT costs

 
Kasmira Jefford
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JD WETHERSPOON reported better-than-expected sales in the Christmas period but its chairman Tim Martin called on the chancellor to rethink “punishing” tax increases levied on the pub sector.

Martin said the company is still on course to open around 50 pubs in the current financial year but warned that it may scale back future expansion if the government decides to go ahead with plans to increase excise duty.

The company, which runs 850 pubs across the UK, said like-for-like sales increased by 3.6 per cent in the 12 weeks to 15 January compared to 1.1 per cent in the first quarter.

However the pub chain said margins had declined and could be hit further by rising costs from excise duty, business rates and carbon tax.

Martin, who expects the price of a pint to go up by 20p after Osborne’s budget in March, said: “I think anyone investing in the pub world will have to take a hard look at those figures because it feels like the government does not want us to invest by punishing pubs with such huge tax increases.

“I think pubs will have to jump through fiery hoops to try and stand still at the present time...no sooner have you made a bit of headway you get another tax increase,” he added.

Wetherspoon is among two dozen pubs and restaurant chains backing a campaign for a cut in VAT, organised by French entrepreneur Frank Borel.