{"id":26770,"date":"2022-07-13T09:48:00","date_gmt":"2022-07-13T13:48:00","guid":{"rendered":"http:\/\/irishexaminerusa.com\/wp\/?p=26770"},"modified":"2022-07-13T11:50:15","modified_gmt":"2022-07-13T15:50:15","slug":"wetherspoon-warns-over-annual-losses-amid-slow-hospitality-sector-recovery","status":"publish","type":"post","link":"https:\/\/irishexaminerusa.com\/wp\/?p=26770","title":{"rendered":"Wetherspoon Warns Over Annual Losses Amid Slow Hospitality Sector Recovery"},"content":{"rendered":"\n
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Pub chain JD Wetherspoon has warned over annual losses after hiking staff wages and ramping up spending on repairs and marketing amid a slow recovery in bar trade.<\/p>\n\n\n\n

The group said it is now expecting losses of around \u00a330 million (\u20ac35 million) for the year to the end of July after investing to attract and retain workers and on the wider business.<\/p>\n\n\n\n

Wetherspoon \u2013 which has more than 800 pubs across the UK and Ireland \u2013 had previously said in May that it expected to break even over the full year, having cheered a return to profit in March.<\/p>\n\n\n\n

The profit alert sent shares in the group falling sharply, down more than five per cent in morning trading on Wednesday.<\/p>\n\n\n\n

It comes as the group said the recovery for many pub firms had been \u201cslower and more laborious\u201d than expected, while the sector is also grappling with soaring costs and a pull-back in consumer spending due to rising inflation.<\/p>\n\n\n\n

Wetherspoon\u2019s latest trading update showed that like-for-like sales in the first 11 weeks of its fourth quarter to July 31st were 0.4 per cent below the same pre-pandemic period in 2019 \u2013 an improvement on the previous quarter, when they fell four per cent.<\/p>\n\n\n\n

Sales of draught ales, lagers and ciders \u2013 previously the biggest driver of pub trade \u2013 were eight per cent below 2019 levels, it revealed.<\/p>\n\n\n\n

\u201cMany 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,\u201d the group said.<\/p>\n\n\n\n

Wetherspoon said staff costs were far higher than before the pandemic, with firms across the sector having to increase wages to overcome recruitment difficulties.<\/p>\n\n\n\n

It added that it is now \u201cwith minor exceptions, fully staffed\u201d.<\/p>\n\n\n\n

Repair costs have also soared, with the group saying it will have spent about \u00a399 million on this in the current year, compared with \u00a376.9 million in 2018-19, due to \u201ccatch-up\u201d work since Covid restrictions lifted.<\/p>\n\n\n\n

Chairman Tim Martin said: \u201cWetherspoon 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.\u201d<\/p>\n\n\n\n

Matt Britzman, equity analyst at Hargreaves Lansdown, said: \u201cIt looks like the older demographic\u2019s still cautious to get out and about and that comes through in the numbers.<\/p>\n\n\n\n

\u201cLagers and ales were replaced by spirits and cocktails as sales in lively city locations, with music on the weekends, performed much better than quieter, suburban, pubs.<\/p>\n\n\n\n

\u201cThe difficulty now, for the entire pub sector, is that drinking and eating at home looks to be sticking around longer than first thought.<\/p>\n\n\n\n

\u201cThat trend\u2019s likely to continue, as the cost-of-living crisis looks poised to accelerate the tightening of purse strings.\u201d<\/p>\n

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