JD Wetherspoon pub chain has predicted larger annualised losses among rising staff pay, slow trade with older consumers choosing to stay at home and sales of pints falling. Sales have dropped by 8% for draught, ales, ciders and lagers but there has been a boom in sales on cocktails.
The group anticipated losses of £30m for the year to the end of July after investing to attract and retain workers, spend on repairs and marketing.
The chair of Wetherspoon’s, Tim Martin, blamed the decline on rising inflation and the unintended consequences of lockdowns, including many people leaving the workforce via early retirement. Many people now work from home, rather than from offices, which has had a significant impact on transport and hospitality businesses.
Matt Britzman, an equity analyst said:
“It looks like the older demographic is still cautious to get out and about and that comes through in the numbers. The difficulty now, for the entire pub sector, is that drinking and eating at home looks to be sticking around longer than first thought. That trend is likely to continue, as the cost of living crisis looks poised to accelerate the tightening of purse strings”
Repair costs have also risen, with the chain already spending £99m in the current year compared to £76.9m in 2018-2019, because of ‘catch up’ work since Covid restrictions lifted.