JD Wetherspoon has reported that its sales have surpassed pre-pandemic levels for the first time, following a challenging five years for the hospitality sector.
The company announced this morning that revenues at its 794 pubs have increased by 5.1% year-to-date, placing the chain's growth above the industry average, as reported by .
"Sales volumes, which were very slow post-pandemic, have recently overtaken pre-pandemic levels," stated Chair Tim Martin. He added that wine sales have shown strong growth and spirits, particularly whisky, are significantly above pre-pandemic levels.
Martin also highlighted that draught sales have been boosted by Guinness, while breakfast sales are "well ahead" of pre-pandemic figures. Despite facing high tax and labour increases, Wetherspoons anticipates profits to align with market expectations.
Martin has been outspoken about the impact of recent tax hikes on the industry, warning that prices will need to rise and smaller operators will "suffer". He believes the combination of increased staffing costs and higher VAT rates for pubs compared to supermarkets "will weigh heavily on the pub industry."
An ‘important milestone’ for Wetherspoons
Analysts predict a profit of around £84m for the financial year, representing a growth of 14 per cent.
The company posted losses for 2020, 2021 and 2022 as the hospitality sector took a hit from the pandemic. "Lifting Wetherspoons volumes above pre-pandemic levels is an important milestone and it's encouraging to see food items follow the trend too," commented Dan Lane, lead analyst at Robinhood º£½ÇÊÓƵ.
"º£½ÇÊÓƵ consumer confidence is on the up and just hit its highest point since December. If inflation resumes its downward journey after the summer and takes interest rates with it, [JD] could get a further demand boost heading into the final stretch of the year.
"The only glaring concern is the debt pile but, for now, the market clearly thinks it's manageable enough to look past," Lane added. JD Wetherspoons anticipates its net debt at the end of the year to be £720m, with a headroom of £220m.
