J D Wetherspoon has reported a 5.1% increase in like-for-like sales for the 25 weeks leading to 19 January 2025, demonstrating resilient performance across most of its business segments.
The company witnessed particularly strong growth in its gaming operations, with slot and fruit machine revenue surging by 11.7%. Food sales showed healthy growth at 5.6%, whilst bar sales rose by 4.5%. However, the hotel division experienced a decline, with room sales falling by 6.5%.
The Christmas period proved especially encouraging for the pub chain, with like-for-like sales climbing 6.1% during the three weeks from 16th December 2024 to 5th January 2025. The second quarter of the financial year maintained momentum with a 4.6% increase in like-for-like sales.
However, while rising sales are an encouraging sign for the group, the Wetherspoon chairman, Tim Martin, took aim at the new Labour government and the impact of their plans to increase national insurance and the VAT treatment of supermarkets compared to pubs will have on the business.
“From 1 April 2025 labour-related costs at Wetherspoon will increase by around £60 million per annum,” Tim Martin said.
“Government-mandated wage increases have a significantly bigger impact on pub and restaurant companies than supermarkets.
“As previously highlighted, supermarkets pay no VAT in respect of food sales, whereas pubs pay 20%. This tax advantage allows supermarkets to subsidise the price of beer they sell.”
In terms of expansion, Wetherspoon has embarked on an ambitious growth strategy, with plans to open nine new establishments this year. The company has already launched two new venues in Marlow, Buckinghamshire and at London Waterloo station. Additional locations are scheduled to open at prominent transport hubs, including London Bridge station and Manchester Airport.
The pub operator is also strengthening its presence in the leisure sector through franchise partnerships with Haven Holiday Parks. Four new franchised establishments are set to open across popular holiday destinations, bringing the total number of franchised venues to seven.
Despite selling six properties during the period, which generated £4.1 million in cash, the company’s total sales grew by 4.0%. The slight difference between total and like-for-like sales growth reflects these property disposals. Wetherspoon currently operates 796 pubs across its estate.
“Wetherspoons have served up a lukewarm trading update this morning after rising food and drink sales during the Christmas period were all but watered down due to the rising cost of operations,” said Mark Crouch, market analyst at eToro.
“Despite coming off the back of a record year, the pub operator is facing significant pressure from increasing expenses which has led Wetherspoons’ chairman, Tim Martin, to publicly call out Sir Keir Starmer in the latest trading update, urging a resolution to the “tax discrepancy” surrounding the 20% VAT on food sales.”