PUBS group JD Wetherspoon is feeling the sobering effects of lower consumer spending and tax and duty rises with sales growth slowing in recent months.
Same outlet sales for the 13 weeks to 25 April slipped 0.8 per cent. This was much steeper than the 0.2 per cent decline recorded over the nine month period.
Meanwhile, total company sales rose 3.6 per cent in the third quarter – slightly lower than the four per cent registered for the financial year to date.
The figures disappointed the City, sending its shares tumbling to close 9.5 per cent down at 492p.
The group, which owns 767 pubs across the UK, said profits and cashflow were “resilient” with margins before exceptionals still around 10 per cent. This comes despite price rises in January and March following the return of VAT to 17.5 per cent and higher excise duty levels.
Wetherspoon, which has opened 26 new sites so far this year and closed two, says it remains confident of its prospects for this financial year but warned that 2011 could be more difficult.
“However, we now feel slightly more cautious about the outlook for the next financial year, as a result of the annualised effect of recent tax and duty increases, and higher interest charges, combined with the risk of more subdued consumer expenditure,” it said in a statement.
The group plans to open 45 pubs this year.