JD Wetherspoon is well poised to take on the challenges of the current trading landscape and make its way to recovery, founder and chairman Tim Martin told MCA.
Following this morning’s trading update – which reported fourth-quarter like-for-likes at 0.4% below pre-pandemic levels – the company is optimistic that sales will continue to bounce back.
“Trade has improved, albeit at a slower pace,” Martin said. “The summer helps, we’ve got a few good beer deals, we’ve invested quite a lot in the staff and the buildings.
“I think we’re in as good a position as we’ve ever been. It just seems to be a longer recovery.”
The pub operator is investing heavily in venues as a way to “make pubs more attractive” and encourage customers to return, Martin said. He is optimistic the value-led proposition will attract customers as the squeeze on budgets intensifies.
“Will we raise prices? Perhaps a bit,” he added. “We have raised them over the past 20-30 years, just less than others.”
“I don’t think it’s too different whether you’re a so-called budget chain or Gordon Ramsay. Everyone’s dealing with the same issues.”
With spirits and cocktails being the biggest driver of alcohol sales, while ales, lager, and cider remain slow to bounce back, the company has added to its spirit range. It has also added craft beers and is contemplating a cider festival to drive beer sales, Martin said.
“When sales slow down, while running a pub company, it’s imperative to improve on all fronts.”
Martin also believes investment in staff has helped the business mitigate recruitment struggles. The company reported high retention levels and that it is “fully staffed” with minor exceptions.
“It’s the continuation of a long-term trend. We’ve got over 16,000 staff who are shareholders,” he commented. “We continue to try and improve conditions.”
Martin also expressed optimism at recent numbers of footfall recovering in the capital. London venues have fallen behind their counterparts in other city centres and suburbs, according to this morning’s update.
“London is coming back, but it’s been a bit slower,” Martin said. “When the universities come back, when there’s less working from home, London will revive itself as it’s always done.”
Over the long term, the company will practice a cautious approach when it comes to expenditure.
“Like everyone else, we’re looking at how money is spent,” Martin said. “But there’s a limit to mitigation. We always look at every angle, but there’s no rabbit we can pull out of a hat.”
The chairman has been vocal in calling for tax reform, citing the tax disparity between pubs and supermarkets, which pay zero VAT and lower business rates.
“I think we’re unlikely to get tax reform,” he said, commenting on the current political environment. “Most individual publicans understand it’s of vital importance; they have to justify to the customers paying £5 per pint vs £1 at the supermarket.
“It’s a winnable case, but the big companies haven’t much supported tax equality.”
