Poor Wether forecast
Last updated 11:43, Monday, 08 September 2008
JD Wetherspoon – the pub group with outlets across Cumbria – has reported a steep dip in profits.
The firm, which runs the Henry Bessemer, in Workington, the Bransty Arch, in Whitehaven, and the Woodrow Wilson, in Carlisle, saw adjusted pre-tax profits fell 11 per cent to £55m in the year to July.
That was despite a 2.1 per cent rise in sales to £907.5m, mainly down to increased food sales.
Like-for-like food sales jumped 7.9 per cent in the year, but bar sales slid 4.3 per cent in the first full year of trading since the smoking ban.
Pubs across the UK are struggling with a deadly cocktail of the credit crunch, falling consumer spending and cheap competition from supermarkets.
Poor summer weather has also contributed to the bleak outlook.
Wetherspoon said food now makes up about 29 per cent of its business, compared with 17 per cent 10 years ago. Drinks ordered with food make up another third.
The firm said increased taxation had a big impact on its trading, even more so than energy bills.
A company statement said: “In the current financial year, we continue to estimate that increases in excise duty on alcoholic drinks, minimum wage-related costs and increased statutory entitlements will amount to £16m.”
Chairman and founder Tim Martin said he expected more increases in food, energy, labour and energy costs this year.
Mr Martin said a like-for-like sales increase of three per cent was needed to offset these costs.
This year has been tough for pubs, clubs and restaurants across Cumbria and has seen many high profile closures, including The Ship at Dovenby, Babylove in Carlisle, and Leonardo’s, also in Carlisle.
MLegg@cngroup.co.uk
