A quiet Christmas has left JD Wetherspoon nursing a New Year hangover after the pub chain disclosed a slowdown in recent sales growth.
The company, which has more than 900 pubs, said like-for-like sales were about 2% higher in December and had slowed further over the last fortnight, compared with a 6.3% growth rate reported in November.
Margins were under pressure too following last year’s above-inflation 5% increase in pay for staff and a rise in utility and supplier costs.
The company is also being squeezed by increased price competition from supermarkets, with drink-led bar sales flat in the past two months.
Chairman Tim Martin said the pub industry continued to be at a disadvantage as supermarkets do not have to pay VAT on food sales and are effectively able to subsidise alcohol prices.
He said there was a “dire need” for the sector to campaign for equal tax treatment.
Mr Martin said: “Wetherspoon has had significantly better sales growth in the last couple of years than our main competitors, reflecting a pattern that has continued since our flotation.
“Even Wetherspoon, however, has seen flat bar sales in the last two months, when food sales have continued to rise. Inevitably, bar sales in the industry as a whole, especially where pubs have not benefited from Wetherspoon’s level of investment, will have fared less well.
“This situation reflects the dire need for the pub industry to campaign for equal tax treatment for pubs and supermarkets.
“It is certain that the current wave of pub closures, which continues at a high level, will accelerate when economic growth slows or reverses.”
The company said it continues to expect a “broadly satisfactory outcome” for the financial year to July, although brokers at Peel Hunt responded to the update by cutting their pre-tax profit forecast by 4% to £77.6m. This is below the £79.4m reported last year. Shares fell 2%.