JD Wetherspoon beer sales lag pre-Covid levels as recovery ‘more laborious than anticipated’
JD Wetherspoon has said sales of pints were eight per cent below pre-pandemic trading and it expects to post higher losses this year.
While a “boom in pub sales” had been anticipated following the easing lockdown measures, recovery for many venues had been “slower and more laborious than was anticipated,” the budget pub chain said.
Like-for-like sales in the first 11 weeks of the fourth quarter were minus 0.4 per cent, compared to the equivalent period in 2019.
However, sales had improved compared to the previous quarter, when they dipped four per cent.
The London-listed firm’s share price tumbled some eight per cent on Wednesday.
Inflation had proved to be “far higher and more intractable than anyone anticipated,” JD Wetherspoon chairman Tim Martin added.
However, he said the company remained “cautiously optimistic about future prospects.”
Alex Smith, Third Bridge analyst warned the pub industry was “facing a wave of closures” with energy bill hikes potentially “the final nail in their coffin.”
While sales of draught ales, lagers and ciders were below 2019 levels, sales of spirits were up 4.4 per cent while cocktails had boosted 18.6 per cent.
Hotel rooms were also up 8.4 per cent, food sales were elevated 2.1 per cent and fruit machine sales were up 16.6 per cent in the quarter.
City centre locations had fared better than suburban locations or smaller towns, “contrary to expectations,” the pub chain said.
Losses for the 2022 financial year will be higher than expected at approximately minus £30m on a post-IFRS 16 basis, the company said.
This was due to heavy investment in labour, repairs and marketing, following the ending of restrictions in February.