JD Wetherspoon warns of £30m loss after raising staff pay

Pub chain JD Wetherspoon has warned it will plunge to a loss of around £30m this year after raising staff wages and investing in site repairs.

The group, which operates around 800 pubs in the UK and Ireland, said losses would be higher than expected in its annual results.

Wetherspoon announced in May that it expected to break even this financial year.

Chairman Tim Martin also blamed the increase in people working from home and lingering impacts of coronavirus lockdowns for slowing sales.

“Many people predicted a boom in pub sales when lockdowns and restrictions ended, due to pent-up demand, but recovery for many companies has been slower and more laborious than was anticipated,” the company said.

Wetherspoon said that although labour costs were now “far higher” than in 2019 it was fully staffed, with a few “minor exceptions”, and its employee retention rate had improved.

Like for like sales at Wetherspoon in the first 11 weeks of quarter four of the current financial year were down 0.4% on the same pre-pandemic period in 2019. This was an improvement on the previous quarter, where sales were down 4%.

Sales of draught ales, lagers and ciders, historically the biggest revenue drivers to pubs, were 8% lower than in 2019.

But Wetherspoon said spirits, cocktails, food, hotel rooms and slot machines had all seen a rise in sales on 2019 levels.

The group said it had invested heavily in site repairs and was playing “catch-up” after lockdowns, with costs expected to be £99m compared to £76.9m in 2019.

Marketing spend had also increased with new menus released after changes in coronavirus rules.

The company has long-term contracts for energy supplies and many bar and food items, meaning it has avoided much of the inflationary pressure driving up prices.

Martin said the chain remained “cautiously optimistic” about its future.