J D Wetherspoon plc fell 5.9% this morning after releasing its pre-close statement for the financial year.
For the 11 weeks to 12 July 2015 like-for-like sales increased by 2.9% and total sales increased by 6.5%. In the year to date (50 weeks to 12 July 2015) like-for-like sales increased by 3.4% and total sales increased by 7.6%, showing a slow in growth over the past few months.
In his statement, the chairman of Wetherspoon, Tim Martin, said:
“The recent government announcement regarding the “living wage” adds considerable uncertainty to future financial projections in the pub industry. The average price of a pint in a supermarket is less than GBP1 and we estimate staff costs to be around 10% or 10 pence. In contrast, a pint in a pub costs around GBP3 and staff costs are about 25% or 75 pence. Increased labour costs therefore affect pubs with far greater force than supermarkets.
“This disadvantage is compounded by a huge VAT and business disparity between pubs and supermarkets, which is putting unsustainable pressure on many pubs in our industry, especially in smaller towns and less-affluent areas.
