Demand for real ale drives JD Wetherspoon sales rise
24 Jul 2013:
Value pub chain's like-for-like sales rose 3.5% in the 11 weeks to 14 July
Value pub chain's like-for-like sales rose 3.5% in the 11 weeks to 14 July
JD Wetherspoon is on track for improved results at the end of the financial year. Photograph: Tim Ireland/PA
Investors in JD Wetherspoon
have raised a glass to the value pub chain after it reported
better-than-expected sales, on the back of strong demand for real ale,
steak meals and hot drinks.
The pub chain's like-for-like sales rose 3.5% in the 11 weeks to 14 July, putting the company on track for improved results at the end of the financial year. Shares in the business rose 6% to 708.5p in early trading.
JD Wetherspoon, which opens its 888th pub next week, is selling record numbers of Aberdeen Angus steaks, said non-executive chairman and founder Tim Martin.
Hot drink sales were also doing very well, he added, with a typical Wetherspoon's pub selling nearly 1,000 cups of tea and coffee a week – "by some way the highest in the industry".
Real ale sales were also up, he said. Although overall beer sales were flat, this compares favourably to an industry average of declining sales.
The recent spell of hot weather has led to "slightly subdued sales", Martin said, as the pub chain has fewer gardens than the industry average. But last winter's lighter snowfall – following the preceding year's heavy snows that kept people indoors – helped the company to raise like-for-like sales by 6% in the 50 weeks to 14 July.
Prospects for the economy are improving slowly, Martin said.
"People are thinking by the skin of our teeth we have dodged financial Armageddon and maybe we will celebrate with a few pints at Wetherspoons. I think if you summed up the great British consumer that would be their attitude. They are not planning on splashing out at the Ritz." He added: "We have had a massive debt binge; we have now got a hangover and it is going to take a decade or two for the hangover to subside."
The pub entrepreneur also said that the pub industry continued to lose business to the supermarkets, which do not charge VAT on food, while pubs must charge the tax at 20%. "We are affected by [the VAT disparity], but we have been able to fight a rearguard action."
COPY http://www.guardian.co.uk
The pub chain's like-for-like sales rose 3.5% in the 11 weeks to 14 July, putting the company on track for improved results at the end of the financial year. Shares in the business rose 6% to 708.5p in early trading.
JD Wetherspoon, which opens its 888th pub next week, is selling record numbers of Aberdeen Angus steaks, said non-executive chairman and founder Tim Martin.
Hot drink sales were also doing very well, he added, with a typical Wetherspoon's pub selling nearly 1,000 cups of tea and coffee a week – "by some way the highest in the industry".
Real ale sales were also up, he said. Although overall beer sales were flat, this compares favourably to an industry average of declining sales.
The recent spell of hot weather has led to "slightly subdued sales", Martin said, as the pub chain has fewer gardens than the industry average. But last winter's lighter snowfall – following the preceding year's heavy snows that kept people indoors – helped the company to raise like-for-like sales by 6% in the 50 weeks to 14 July.
Prospects for the economy are improving slowly, Martin said.
"People are thinking by the skin of our teeth we have dodged financial Armageddon and maybe we will celebrate with a few pints at Wetherspoons. I think if you summed up the great British consumer that would be their attitude. They are not planning on splashing out at the Ritz." He added: "We have had a massive debt binge; we have now got a hangover and it is going to take a decade or two for the hangover to subside."
The pub entrepreneur also said that the pub industry continued to lose business to the supermarkets, which do not charge VAT on food, while pubs must charge the tax at 20%. "We are affected by [the VAT disparity], but we have been able to fight a rearguard action."
COPY http://www.guardian.co.uk
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