JD Wetherspoon chairman Tim Martin has told MCA that the growth in drink sales across the estate is now almost at parity with food, for the first time in 15 years.
He said the main growth areas for the c900-strong chain were all behind the bar and included craft beer, gin, prosecco and new world wine.
He said the 6% like-for-like growth in the first half of the financial year would be difficult to sustain in the second period because of a myriad of cost challenges facing the sector. He pointed particular blame at an old foe, saying: “Jamie Oliver is increasing costs for the industry with his zeal for the sugar tax. His recent performance shows even he can’t make it work.”
He also gave his opinion on the merger of the ALMR and BHA to create UKHospitality and set out his views on where lobbying efforts should be directed.
On recent trading, he said: “We have seen growth across the board. We have been riding a wave for a couple of years now and we are trying to stay on our surfboard. Things like not running out of steaks certainly help that.”
JDW was hit by the problems affecting meat supplier, Russell Hume, which has been ordered to halt all deliveries after being suspected of non-compliance with food regulations. Other clients of the group include Marston’s, the Jamie Oliver Restaurant Group and Greene King.
Martin said: “It’s very disappointing and frustrating but there’s not much we could do about it. We are trying to find out what went on and make sure it doesn’t happen again but it’s certainly something we don’t want to make a habit of.”
On the outperformance of wet sales, he said: “For a long time food has been outperforming bar sales – maybe 15 years now - and they are now almost equal. In theory drink sales could overtake food but there’s a huge amount of variables.”
He said the disposal programme the group has undergone over the past few years was now largely at an end, saying a “trickle” of sales were still likely but that the group would be concentrating on a “sensible rate of new openings, where opportunities present themselves”.
JDW has made several advances in its use of technology in recent years, including its pay at table app and free coffee refill machines.
Martin said: “What the app provides is essentially table service and in the way that impacts the operations of the pub, it’s no different to table service anywhere else. It comes at a cost but there is clearly demand for it from customers. Equally, free coffee refills won’t make us a fortune but it helps us compete with the coffee chains. Again, it makes the pubs busy but it comes at a cost.”
On the creation of UKHospitality, Martin said: “I don’t have an intimate knowledge of how the trade bodies work but if Kate Nicholls says it is better for the industry then that is good enough for me. For me the main issue they should be focussing on is tax equality. That won’t surprise anyone.
“There is a danger that pubs will be overlooked but with good management that can be overcome. The danger seems to be outweighed by the greater clout of a larger organisation. Kate will get more of an audience from Government if she is acting on behalf of a broader church.”
