Pub chain JD Wetherspoon has warned annual losses will be bigger than expected after ramping up wages to attract staff and spending heavily on repairs and marketing. The group said it is now expecting losses of around £30 million for the year to the end of July after investing in staff and the business to “strengthen our position” for the new financial year.
Wetherspoon said that although sales were now matching those seen in 2019 before the pandemic struck, staff costs were far higher than pre-Covid as firms across the sector have had to hike wages to overcome recruitment difficulties. It added that it was now “with minor exceptions, fully staffed”.
Repair costs have also soared, with the group saying it will have spent about £99 million on this in the current year, compared with £76.9 million in 2018-19, due to “catch-up” work since Covid restrictions lifted. Wetherspoon’s latest trading update showed that like-for-like sales in the first 11 weeks of its fourth quarter to July 31 were 0.4% below the same pre-pandemic period in 2019 – an improvement on the previous quarter, when they fell 4%.
The group had previously said in May that it expected to break even over the full year, having cheered a return to profit in March. “Many people predicted a boom in pub sales when lockdowns and restrictions ended, due to pent-up demand, but recovery for many companies has been slower and more laborious than was anticipated,” the group said.
Chairman Tim Martin added: “Wetherspoon has tried to take a long-term approach to these issues, investing heavily in the workforce, in buildings, in marketing and in contracts with landlords and suppliers, which will hopefully create a solid base for future growth. The company remains cautiously optimistic about future prospects.”
