JD Wetherspooon boss Tim Martin renews attack on tax regime as first half profits fall

File photo dated 15/03/13 of a JD Wetherspoon logo, as JD Wetherspoon reported a drop in profits aft

File photo dated 15/03/13 of a JD Wetherspoon logo, as JD Wetherspoon reported a drop in profits after being squeezed by supermarket competition and a hike in pay and bonuses for pub staff. PRESS ASSOCIATION Photo. Issue date: Friday March 13, 2015. The company, which has 936 pubs, said sales were 4.5% higher on an underlying basis in the six months to January 25 but profits before exceptional items fell 1% to £37.5 million. See PA story CITY Wetherspoon. Photo credit should read: Rui Vieira/PA Wire - Credit: PA

JD Wetherspoon today reported a drop in first-half profits after being squeezed by supermarket competition and an increase in pay and bonuses for its pub staff.

The company, which has 936 pubs, said sales were 4.5% higher on an underlying basis in the six months to January 25 but profits before exceptional items fell 1% to £37.5million.

Margins were under pressure following last year’s above-inflation 5% increase in pay for staff and a rise in utility and supplier costs.

The company also allocated £15.3m in bonuses and free shares to its employees, 98% of which was paid to those below board level and 83% of which was paid to those working in its pubs.

Wetherspoon added that 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.


You may also want to watch:


In the six weeks to March 8, like-for-like sales increased by 1.6%, with total sales lifting by 5.6%.

The company sells about 50 million cups of coffee and tea a year, as well as about 24 million breakfasts.It now plans to cut prices with the aim of tripling coffee and breakfast sales over the next 18 months.

Most Read

However, this means that marketing and labour costs will be higher than anticipated in the second half of the financial year.

The company added that its tax bill amounted to £305.3m in the half-year period, an increase of 5% on a year earlier and including £144.8m on VAT and £75.2m in alcohol duty.

Chairman Tim Martin added: “It is widely acknowledged that the tax disparity with supermarkets is unfair and that pubs create more jobs and more taxes per pint or per meal than supermarkets and that it does not make social or economic sense for the tax regime to favour supermarkets.

“We acknowledge the need to pay a reasonable level of taxes, but hope that legislators will make progress in creating a level playing field for all businesses which sell similar products.”

The company expects to open about 30 new pubs in this financial year, a figure which reflects a slower-than-anticipated rate of regulatory approvals.

Become a Supporter

This newspaper has been a central part of community life for many years. Our industry faces testing times, which is why we're asking for your support. Every contribution will help us continue to produce local journalism that makes a measurable difference to our community.

Become a Supporter
Comments powered by Disqus