Pub group JD Wetherspoon has warned that competition from supermarkets is threatening its trade as higher interest charges caused its pre-tax profits to fall 5.7 per cent in the past year.
Wetherspoon said revenues and operating profits had both hit record levels in the year to 24 July, with sales up 7.6 per cent to more than £1bn and operating profit up 2.3 per cent on 2010.
But it said the economic environment, and the lower tax rates levied on supermarket alcohol sales, were damaging its business.
“The biggest danger to the pub industry is the tax disparity between supermarkets and pubs, creating a serious and unsustainable competitive disadvantage. In addition, our pubs pay far higher VAT than those of our nearest neighbours, Ireland and France, as well as having the second highest rates of excise duty on beer and wine in Europe,” said chairman Tim Martin.
Like for like sales were up 2.1 per cent.
Pre-tax profit before exceptional items fell to £66.8m from £71m in 2010.
Wetherspoon shares have fallen three per cent on the news.