J D Wetherspoon returns to normal trading amid improving sales
However, the company increased investment levels, which are still ‘substantially’ below the pre-pandemic period, on the basis that the adverse effects of Covid-19 were likely to ‘diminish’ in the near future.
In the most recent three-week period, to 13 March 2022, J D Wetherspoon has revealed it has seen sales improve to just 2.6% lower than the equivalent period in 2019.
In its preliminary results for the 26 weeks ended 23 January 2022, the group reported revenues of £807.4m, down by 13.5% on 2020 revenue (£933m). J D Wetherspoon also displayed a loss before tax of £21.3m in comparison to the previous years profit of £57.9m.
This included property losses of £1.8m (2020: £0.2m). The firm said property losses arose from the disposal of four pubs and the closure of two pubs.
The group said following a “traumatic” two years for many businesses and people, the ending of Covid restrictions has brought a return to more normal trading patterns in recent weeks.
In the first half of the financial year, which ended on 23 January 2022, sales were affected by Covid-19 restrictions, and labour costs were high, due mainly to Covid-related absences.
Like-for-like sales were -11.8%, compared to the six-month period ended 26 January 2020, before the pandemic, and were -12.4% for the first four weeks of the second half of the financial year, ending 20 February 2022, compared to the same period in FY20.
Since sales were affected by Covid from about February/March 2020, culminating in a pub closure on 20 March 2020, sales from 21 February 2022 are compared with sales from a similar period in 2019.
Wetherspoon also reported cash sales per week during this three-week period have been approximately 10% above the depressed levels of December 2021, its “busiest” month of the year, indicating an improving trend.
However, the company increased investment levels, which are still “substantially” below the pre-pandemic period, on the basis that the adverse effects of Covid-19 were likely to “diminish” in the near future.
Overall, the company expects the increase in input prices to be slightly less than the level of inflation. The company said it is “confident” of a strong future if restrictions are avoided.
Tim Martin, chairman of J D Wetherspoon plc, said: “Contrary to some reports, the company has a full complement of staff and is fully stocked, with some minor exceptions.
“The government is reported to have spent over £400bn on Covid measures, around nine times the annual defence budget. The expenditure has been financed by the creation of “new money” by the Bank of England, which has led to significant inflation and higher
Taxes.”
He added: “The readiness of the leaders of all the UK’s main political parties to resort to lockdowns, and extreme restrictions, which were not contemplated in the UK’s 2019 plans for pandemics, is the main threat to the future of the hospitality industry, but also to the economy.”
