Wetherspoons defies market expectations to post booming sales

Pubs have had a hideous time of it lately. First there was the smoking ban, then levies on alcohol went through the roof, not to mention extortionate business rates, keg theft (the aluminium is worth a fortune) and margins squeezed by supermarket competition. Around 100 boozers have closed down every month across the UK in the past year. But Wetherspoons, with its 99p pint promotions, 2-for-1 meal deals and tasty local guest ales, has defied the slump to post profits of £46.8m this quarter.

In its first quarter trading update released today – formatted, hilariously, in much-maligned comedy typeface Comic Sans - the chain announced that sales have increased 7.3% and eight new Wetherspoons pubs have opened their doors in the last three months alone.

Wetherspoons hasn’t entirely escaped the pub blight, however. Operating profit is down 0.2% and Wetherspoons chairman Tim Martin is keen to explain why. ‘The current level of tax levied on the pub industry is unsustainable and is directly leading to the closure of many pubs,’ he says. ‘Supermarkets pay no VAT on food sales, whereas pubs pay 20%, creating a tax disparity.

‘In addition,’ he says, ‘British pubs and restaurants now suffer a huge competitive disadvantage, compared with those of our nearest major neighbour France, which levies far lower levels of excise duty and VAT.’

This may be the same gripe he made last quarter but the man still has a point. Looking at the Wetherspoons balance sheet, the amounts siphoned off by the tax man are eye-watering. Tax over the three-month period stands at £453.1m, of which VAT was £204.8 million, excise duty £120.2 million, PAYE and National Insurance was £65.2 million, corporation tax £21.2 million and property tax £41.7 million.

Nevertheless, Martin is persevering with plans to open 50 pubs this financial year (eight down, 42 more to go, Tim!). There are enough empty pubs to fill, that’s for sure. But perhaps it’s time for government to review its pub-bashing policies before any more great British boozers call time at the bar for the last time.