Wetherspoon warns of bigger-than-expected £30m annual loss
The pub chain JD Wetherspoon has warned of bigger-than-expected annual losses after increasing staff wages in a tight labour market amid a slow recovery in bar trade that it partly blamed on the shift to home working.
The group said it was anticipating losses of about £30m for the year to the end of July after investing to attract and retain workers, and ramping up spending on the wider business including on repairs and marketing.
Wetherspoon, which has more than 800 pubs across the UK and Ireland, had said in May that it expected to break even over the full year, having welcomed a return to profit in March.
The profit alert sent shares in the group falling sharply, down more than 10% in morning trading on Wednesday.
The chair of Wetherspoon, Tim Martin, blamed the decline on rising inflation and the “unintended consequences” of coronavirus lockdowns, including many people leaving the workforce via early retirement.
“Many people now work from home, rather than from offices, which has had a significant impact on transport and hospitality businesses,” Martin said.
“The ‘fear factor’, used by governments to encourage compliance with lockdowns and restrictions, has also had lingering after-effects, with many people remaining cautious about leaving their homes.”
Wetherspoon said the recovery for many pub firms had been “slower and more laborious” than expected, while the sector is also grappling with soaring costs and a pull-back in consumer spending due to rising inflation.
The group’s latest trading update showed that like-for-like sales in the first 11 weeks of its fourth quarter to July were 0.4% down on the same period in 2019. This was an improvement on the previous quarter, when they fell 4%.
Sales of draught ales, lagers and
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