J D Wetherspoon has seen strong sales growth in recent weeks as cash-strapped consumers hunted out cheaper food and drinks.
Wetherspoon’s, which runs 827 value-orientated pubs across the UK and Ireland, revealed that its sales jumped 11% in the first 10 weeks of the final quarter of its financial year, compared to the same period before the pandemic.
Striking an upbeat tone, the company said its sales of beverages and meals were also up 11.5% compared with a year earlier, shrugging off concerns that consumers were tightening their belts and shunning the hospitality sector during the cost of living crisis.
Wetherspoon’s noted that its results during the current financial year had been boosted by its decision to offload 28 underperforming pubs, resulting in a net cash inflow of £6.5m. It opened three new pubs during the same period.
However, the company dismissed suggestions that it had shut the venues to raise cash, insisting that most of the closures were in places where there was another Wetherspoon’s pub nearby. A further 22 pubs remain on the market or are under offer.
The company expects its full-year profit to be in line with market expectations.
Wetherspoon’s chairman, Tim Martin, said that improving sales and an expectation that costs, including energy bills, would continue to fall meant the company anticipated “an improved outcome for the next financial year”.
NAM Implications:
- Offloading 6% of the estate to eliminate overlap and avoid profit dilution should be seen as ‘normal housekeeping’ rather than a cash grab.
- Key is to focus on opportunities for suppliers in appropriate categories…
- …and go for fair share of sales and profit.
