JD Wetherspoon’s chief executive John Hutson has said this financial year could be the first in which the company’s estate shrinks.
Speaking after this morning’s half-year results, Hutson also talked about the company’s rationale for putting up menu prices and dropping Sunday roasts.
He said he expected the 2.9% rise in like-for-like sales seen in the first half of the year to be broadly replicated in the final six months and discussed the evening out of sales growth across wet and dry, as well as the growing importance of accommodation.
JDW’s H1 performance showed like-for-like sales up 2.9% across both drink and food. This compares to 1.5% and 10.5% in the same period for the same period last year.
Hutson said: “There’s no doubt that in the last few years we have seen much greater growth in food but we have continued to grow our drink sales. We will have to see more data to see if we have reached a plateau in terms of food sales.!
Accommodation like-for-like sales rose 7.5% in the six months, compared to 11.8% in the same period last year.
Hutson said: “So far accommodation growth has been opportunistic. We have found it’s not too taxing for our managers to operate a hotel alongside the pub so it complements the business. I
“If it grows into something else over the coming years then so be it but at the moment we don’t see it as a primary driver.”
On sales increases, Hutson said: “We put our prices up last week but not across the board. We held the prices on soft drinks and most of our craft beers but on the rest of the bar prices went up by about 5p and a bit more than that on food.”
He added: “We made the investments in wages last August and we put our prices up last week so the two aren’t directly related. If we can do a lot of other things well – create footfall and grow sales then it takes the pressure off having to raise prices.
“It wasn’t a case that our backs were against the wall so we had to put prices up – it was part of a normal review of the business.”
On the success of the offer of a full-english breakfast for £2.99, which was introduced last year but upped to £3.25 last week, Hutson said: “We were pleased at the response to the lower prices on breakfast and the expansion of the deli deal. That combination has helped keep the momentum in our like-for-like sales.”
On expectations for sales in the rest of the year, he said: “We have grown sales by 2.9% and we are doing a bit better in the last six weeks. If the trend continues we would be pleased. We are saying we would like to repeat what we did in the first half, in the second half. “
On the decision to drop the Sunday Roasts, he said: “`We listen to our managers and they were saying to us it wasn’t the right offer for us on a Sunday. A lot of it is to do with consistency and the need to ensure that.”
On the prospects for disposals and acquisitions, he said: “We have placed around 50 pubs on the market during the course of the year and we are going to open 15 new ones. It’s not a fire sale so if we don’t find reasonable buyers then there’s every chance we will retain them.
“It could well be that at the end of the year we have fewer pubs than we started with.
“That would be the first time for us as a plc.”
