British pub group J D Wetherspoon reported on Friday higher profit in the first half of the year, supported by a gradual easing of costs and an increase in customers coming to grab drinks and food.
The group, which owns and operates pubs across the UK and Ireland, reported a profit before tax of £36 million (€41.9 million).
Trading
In its financial statement, J D Wetherspoon noted that there has been a reduction in the number of trading Wetherspoon pubs in the last decade, which peaked at 955 in December 2015.
Some leasehold pubs have been surrendered to landlords at the end of the lease or by negotiation, and other pubs have been sold to third parties. At the end of the period under review, the company traded from 814 pubs.
Sales
In spite of a reduction in the overall number of pubs, sales have continued to increase - total sales are now about one third higher than in 2015, when the number of pubs peaked, and sales per pub have increased by about 50% since then.
Since 2010, the company has invested £448 million (€522.5 million) in acquiring the freehold 'reversions' of pubs where it was previously the tenant. Seventy one percent of pubs are now freehold, an increase from 41% in 2010.
Potential
The group estimates that there is potential for about 1,000 pubs in the UK.
"The company currently anticipates a reasonable outcome for the financial year, subject to our future sales performance," said Tim Martin, Chairman of JD Wetherspoon.
Price Disparity
In January, Martin warned about price disparity between pubs and supermarkets.
“For pubs, the average selling price of a pint is around £4.50 [€5.26]. The labour per pint is therefore around £1.35 – 30% of £4.50 – necessitating a 13.5-pence increase in the selling price to cover extra costs,” said Martin.
“The inevitable consequence is that increased labour costs raise the differential in prices between the hospitality industry and supermarkets.”
Article by Reuters, additional reporting by Hospitality Ireland.
