Wetherspoon’s boss: hospitality holding off price rises could be ‘catastrophic’
The boss of JD Wetherspoon has warned it could be “catastrophic” for pubs and restaurants to hold off raising prices as costs continue to soar, as the pub chain revealed that the “ferocious” impact of inflation has fuelled a dramatic increase in its bills.
Tim Martin said that Andrew Bailey, the governor of the Bank of England, was right to warn companies to be mindful of how much they put up prices to avoid continuing to fuel an inflationary cycle, after the headline annual rate unexpectedly rose to 10.4% last month.
However, the pub chain’s outspoken chairman and founder cautioned that with rapidly increasing costs in sectors including energy, labour and food – where prices are rising at their fastest rate in 45 years – businesses have little choice.
“The two things that keep price rises low are competition and, by definition, low inflation,” Martin said. “If input costs are high, which they are in the hospitality industry, it’s very difficult for pub companies to avoid price rises, and it might produce catastrophic results if Mr Bailey’s advice was taken too literally – although he’s right to say it.”
Martin’s comments came as he said that “ferocious” inflation was hittingWetherspoon’s, even as the pub chain reported a return to profitability and a boost in sales.
Revenues for Wetherspoon’s half-year to 29 January hit £916m, up 3% on the same period in 2019, and 13.5% on last year. In its most recent trading, the seven-week period to 19 March, sales were up 9% compared with 2019.
The company, which runs more than 800 pubs across the UK, reported a small profit of £4.6m in its financial half year to 29 January. This compares with a loss of £26m in the same period last year and a £50m profit in pre-pandemic 2019.
Profits have
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