Fri. Dec 3rd, 2021

JD Wetherspoon has warned against a shortage of older customers returning to its pubs with sales of beverages such as traditional beer and stouts down by almost a third compared to 2019.

The bar group said on Wednesday that sales in the 15 weeks to November 7 were 8.9 percent lower compared to the record turnover it achieved in the same period in 2019. It did not give a comparison with 2020 sales in its trade update.

Wetherspoons noted that the demand for beverages generally preferred by the older demographics has suffered. Stout sales fell 20 percent from 2019 levels and traditional beer fell about 30 percent.

Tim Martin, Wetherspoons’ longtime founder and chairman, said a “substantial part” of the company’s trade comes from more senior drinkers thanks to its policy of not playing music or watching sports.

“Some customers were understandably cautious. “Improvement in trade will therefore depend to some extent on the prospects for the Covid-19 virus,” he said.

Breakfast revenue was also hit by the number of people still working at home, with coffee sales down 30 per cent on 2019.

Shares in the bar group fell more than 3 per cent in early London trading on Wednesday.

Analysts at Shore Capital have questioned whether consumers can switch to more expensive pubs due to a build-up of savings during restrictions and a desire to treat themselves.

Wetherspoons, founded in 1979 by Martin and until its first ever loss before tax during the pandemic, is known for its cheap pints and food.

Despite the lack of a share of its traditional customer base, overall sales improved against the 17.8 percent drop in sales in the last 10 weeks of the previous financial year, when pubs reopened inside, but restrictions such as social distance and table service applied.

The group noted that younger customers maintained a strong demand for spirits, with vodka rising 17 per cent and rum rising 26 per cent in the 15 weeks to 7 November. Sales of cocktails increased by 45 percent.

Wetherspoons also benefited from the surge in domestic holidays over the summer with sales at its hotels rising 11.5 per cent. But, in line with other restaurant and bar companies, Wetherspoons said trade in London still lags far behind that in other regions. Sales rose by 9 per cent in Liverpool and 11 per cent in Newcastle, but fell in London by 17.4 per cent compared to 2019.

In recent weeks, Wetherspoons has reduced the price of some of its beer to 99p per pint and on meals such as fish and chips to £ 3.99 until the end of February in an effort to boost sales.

After a state tax break, the hospitality industry does not have to return until March next year to pay VAT at the full rate.

Douglas Jack, an analyst at Peel Hunt, said the price reductions would help turnover, but the benefit would likely be “offset by lower margins”.

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