Pub chain JD Wetherspoon noted a return to profits after fighting “wild” inflation, but said it welcomed the Bank of England’s view that the worst is now easing.
The pub chain was forced to raise food and drink prices by 7.5% last month, raising the price of a pint by 29p in some pubs. She insisted that prices remained “very competitive” at the time and that growth was still below the rate of inflation.
Wetherspoons’ low prices have made it “the most competitive we’ve ever had,” said chairman and founder Tim Martin.
“Inflationary pressures in the pub industry… have been intense, especially in terms of energy, food and labor,” he said.
“The Bank of England and other authorities believe that inflation is coming down, which would certainly be a big advantage if true,” he added.
The company was able to report a pre-tax profit of $4.6 million for the half year ended Jan. 29, which Wetherspoon earned in 2019 before Covid restrictions were put in place.
Like-for-like sales were up 5 percent from pre-pandemic levels, but bar sales were down (0.8 percent), while food sales were up (+12 percent) and slot machine sales were up 44 percent. cent. It also benefits from higher sales due to more hotel rooms (+13%).
Mr Martin said the supply chain problems that plagued the company as the economy rebounded from Covid-19 “largely disappeared.” He said that he thought the problems were “probably a phenomenon of tension caused by the global reopening after the pandemic, and not a consequence of Brexit.”
His outspoken support for Brexit and opposition to Covid lockdowns have made the businessman notorious.
The company said it was not suffering from a staffing shortage and reintroduced a £15 million employee bonus. The company said it is “cautiously optimistic” about progress this year as sales and profits have risen significantly.
Wetherspoons said it has invested another £48m in its pub, closing eight but expanding others and improving technology in many of them.
Richard Hunter, Head of Markets at Interactive Investor, commented: “Wetherspoons could raise a glass after returning to pre-pandemic trading levels and more.” not to the point where it threatens its value proposition.
If inflation forecasts turn out to be correct, “it will have an immediate positive impact on the company’s outlook,” he said.
“There will be general concerns about the current state of the UK economy and in particular the tendency for consumers to spend as they please. In a way, this can play into the hands of Wetherspoons with their no-frills, no-frills, well-priced offering,” added Mr. Hunter.
Source: I News
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