Pub giant Wetherspoons jumps back to profit on back of bumper food sales

The company, which runs 826 pubs across the UK, saw total sales rise by 10.6 per cent to £1.92bn for the year to July 30.

Wetherspoons said like-for-like sales grew by 12.7 per cent year-on-year, as it benefitted from a significant rise in food sales, which increased by 17.7 per cent.

Meanwhile, bar sales increased by 9 per cent, its hotel business witnessed an 11.8 per cent rise and there was a 26.4 per cent increase in sales through slot and fruit machines.

Bosses at the business said sales growth has continued in recent weeks, with like-for-like sales increasing by 9.9 per cent over the nine weeks to October 1.

Tim Martin, chairman of JD Wetherspoon, said: “Wetherspoon continues to perform well. The company currently anticipates a reasonable outcome for the financial year, subject to our future sales performance.”

During the year, Wetherspoon slightly trimmed its pub estate, as it sold, closed or terminated the leases of 31 pubs.

It said there was a £7m cash boost after fees as a result. Wetherspoons also opened three pubs.

Mr Martin also told the PA news agency that its focus on “the basics” and competitive pricing have driven its improved performance.

He said: “Wetherspoons is a resilient business. It has been around for 44 years and our staff have been working here for an average of 14 years.

“The business has been through nearly everything and remains strong.

“Working to remain very competitive in price has been very important over the past year because it has been difficult for everyone financially.

“We have focused on the basics – things like real ale and coffee – while making sure the pricing is right. That’s what has worked.”

James Wheatcroft, equity analyst at Jefferies, said: “Momentum continues into the current year.

“We argue that Wetherspoons’ low relative price positioning and well-located and well-invested premises will gain market share and benefit from trading down.”

Roberta Ciaccia at Investec added that the latest figures were “strong and broadly in line with market expectations”.

Richard Hunter, Head of Markets at interactive investor, commented: “Wetherspoons continues to recover from the pandemic hangover which has left some stains on the business, but where progress is increasingly evident.

He added: "While sales may have returned to something resembling normality, the pressure on margin and profit remains evident. However, there has been progress with the previous year’s wafer-thin operating margin of 1.5 per cent rising to 5.6 per cent. Wetherspoons had previously noted “ferocious” inflationary pressures, particularly in regard to energy, food and labour, but more recently some of these pressures have started to ease.”