Wetherspoon 'optimistic' about opening new pubs despite €36m loss      

The boss of British pubs group Wetherspoon, which is expanding into Ireland, said it's still "optimistic" about opening new outlets despite deepening losses amid the cost-of-living crisis. Its shares closed almost 8% lower. 

Chairman Tim Martin said the company was sticking to its long-held policy of heavy investment "in the workforce, in buildings, in marketing, and in contracts with landlords and suppliers" despite the huge rise in inflation.   

Wetherspoon has over 800 pubs, which are located mostly in Britain. It also has eight properties in Ireland, including in Dublin, Cork, and Carlow, and has long stated its ambitions to open new Irish pubs.

However, the pubs group has in the past highlighted the fallout of the Covid restrictions in Ireland which lasted longer than in Britain.                         

In a new update, Wetherspoon said that recovery from the Covid-19 lockdowns had been much slower than it once thought and it would post a larger-than-anticipated loss of around £30m (€36m) in its current financial year.      

Sales on a like-for-like basis for the 11 weeks to the end of July were 0.4% lower than in the same period of 2019, and were 8% below levels before the pandemic, in 2019. 

"Many people predicted a boom in pub sales when lockdowns and restrictions ended, due to pent-up demand, but recovery for many companies has been slower and more laborious than we anticipated," the company said. 

Mr Martin in the update did not specifically comment on Ireland in any detail. 

However, he has in the recent past spoken about his confidence about the "strong demand for pubs in Ireland".

Wetherspoon also said its energy costs were fixed through the 2023 financial year "which predate the current spike in energy costs", and has long-term fixed borrowing costs, which means it "believes that its overall costs will increase by less than the current rate of inflation in the financial year 2023".

A fall in beer sales from 2019 levels can probably be attributed to working from home, people stepping out less during the day, and health concerns among older people, Mr Martin told Reuters.

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Mr Martin has been an outspoken critic of Britain's handling of the pandemic and believes the long-term challenge for the pub industry continues to be the tax disparity with supermarkets.

"The difficulty now, for the entire pub sector, is that drinking and eating at home looks to be sticking around longer than first thought," Hargreaves analyst Matt Britzman said.

Shares in Wetherspoon and other British pubs groups have been hit hard by the cost-of-living crisis. 

The 8% shares drop for Wetherspoon has brought the losses for the pubs group to 45% from a year ago. 

Mitchells & Butler, the pubs and restaurants chain, in which JP McManus and John Magnier, hold a significant stake, have fallen by almost 33% in the past year. 

And shares in Marston's, a pubs and hotels company, have fallen by 45% over the same period. 

- Additional reporting Reuters