Wetherspoon boss Sir Tim Martin hits out at 'unfair' tax differences between pubs and supermarkets

But he said the labour and energy costs remain well above pre-pandemic levels – making it harder for pubs to compete with supermarkets.

He said: “A main issue for the pub trade is that labour costs are around 30 per cent of sales, compared to around 10 per cent for supermarkets.

"The price of a pint in a supermarket is about £1, so a 10 per cent increase in labour costs (which are around 10 pence per pint) necessitates a one pence increase in the selling price to cover costs.

"However, for pubs, the average selling price of a pint is around £4.50. The labour per pint is therefore around £1.35 (30 per cent of £4.50), necessitating a 13.5 pence increase in the selling price to cover extra costs.

"The inevitable consequence is that increased labour costs raise the differential in prices between the hospitality industry and supermarkets.

"At the same time, pubs pay far higher VAT and business rates than supermarkets, further exacerbating the price disparity.

"In particular, pubs and restaurants pay 20 per cent VAT in respect of food sales, whereas supermarkets pay almost nothing, a tax differential which is surely unfair.

"Notwithstanding these issues, Wetherspoon currently expects an outcome for the financial year in line with market expectations, and will provide further updates as the year progresses."

His comments come as Wetherspoon sold five pubs and surrendered leases on a further eight to bring in £3.8m.

It has opened two new pubs – one at London Euston and another at Heathrow airport, with its total estate now standing at 814 pubs.

In the 25 weeks to January 21, like-for-like sales were 10.1 per cent higher than the same point a year ago.

Bar sales increased by 11.8 per cent, food by 7.9 per cent and slot/fruit machines by 10.4 per cent.

It has recently been announced that a new Wetherspoon pub will be opening at the Haven Primrose Valley Holiday Park in Filey in March.

Officials said £1.1m is being invested in the new Primrose Valley pub, with the partnership part of a wider £4m investment by Haven in expanding its food and drink offering this year.