JD Wetherspoon chief warns that the price of a pint could go up as the bargain pub chain sees costs spiral
- Wetherspoon founder warned that the pub chain’s costs will rise this year
- He said this may have a knock-on effect on the price of drinks at the pub chain
- Sales slowed over the summer as its rivals benefited from the World Cup and the warm weather, but profits rose to record levels
JD Wetherspoon’s founder and chairman Tim Martin dampened the mood this Friday with a warning that costs at the 900-strong pub chain looked set to rise this year.
The prominent leave campaigner told the BBC that an anticipated hike in wage costs, interest payments and taxes could have a knock-on effect at the beer pump. The price of food and drink ‘may have to go up a bit’, he said.
Martin’s words of caution came as Wetherspoon unveiled record profits – up 4.3 per to £107.2million in its last financial year.
There are around 900 Wetherspoon pubs in the UK but Martin warned expansion may slow
But its like-for-like sales growth of 5 per cent was slower than the 5.2 per cent it recorded in the first nine months of the year and in the lower end of analyst expectations.
The budget pub chain did not enjoy the same boost from the World Cup that some of its rivals did as it keeps prices low by limiting its spending on extras such as music and televised sports.
Shares in Greene King rose 11 per cent last week after it toasted a sales rise on the back of the tournament.
Sales at the lower end of expectations should not come as a surprise, said AJ Bell investment director Russ Mould.
‘Wetherspoon rarely shows live sport outside of big events like the World Cup so it is not an obvious destination for people looking to follow the Three Lions.
‘And relatively few of its premises have much of a beer garden, making it a less appealing venue to soak up some rays while enjoying a drink,’ he explained.
Mould said ‘it would be wrong’ to get too hung up on these short-term factors because the company’s model is ‘continuing to deliver’.
But he warned that rising costs will make it difficult for the business to deliver a repeat performance.
Martin also said today that he was hoping for a ‘no deal’ Brexit.
Wetherspoon founder and chairman Tim Martin (above) is a prominent leave campaigner
‘A deal is a bad thing – if we don’t have a deal and embrace free trade, prices will go down in the shops. We will be in a much stronger position on a free trade basis that some people call a no deal,’ he said.
In June this year the company said it would replace EU-made products such as Champagne with alternatives from the UK and countries outside the bloc.
Last week Martin said Wetherspoon will stop serving Jagermeister as well as French brandies Courvoisier VS and Hennessy Fine de Cognac.
Shares were flat in morning trading at £12.79, valuing the company at about £1.3billion.
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