Wetherspoons defies market expectations to post booming sales

Ah, Wetherspoons. One of the few pubs in the land where you can still get a pint for £2.60. Despite onerous taxation, profits are up and the chain has opened a host of new pubs. Cheers!

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013
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.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Mike Ashley: Does it matter if the public hates you right now?

The Sports Direct founder’s response to the COVID-19 pandemic has drawn criticism, but in the...

4 films to keep you sane during the coronavirus lockdown

Cirrus CEO Simon Hayward shares some choices to put things in perspective.

Pandemic ends public love affair with Richard Branson et al

Opinion: The larger-than-life corporate mavericks who rose to prominence in the 80s and 90s suddenly...

The Squiggly Career: How to be a chief strengths spotter

When leading remotely, it's more important than ever to make sure your people spend their...

"Blind CVs don't improve your access to talent"

Opinion: If you want to hire socially mobile go-getters, you need to know the context...

The highs and lows of being a super-achiever

Pay it Forward podcast: techUK boss Jacqueline de Rojas and Google UK's marketing strategy and...