Wetherspoons drinkers brace for price rises after budget

The boss of JD Wetherspoon has given warning that prices are likely to rise in response to measures announced in last week’s budget as it faces a significantly higher tax bill.
Tim Martin, the pub group’s founder and chairman, flagged that cost inflation has “now jumped substantially again” following the chancellor’s £40 billion package of tax increases, a large portion of which will be shouldered by businesses through an increase in employers’ national insurance contributions.
He said that as a result of the substantial rise in costs: “All hospitality businesses, we believe, plan to increase prices. Wetherspoon will, as always, make every attempt to stay competitive as possible.”
The group’s tax and business costs are expected to rise by about £60 million a year because of these measures, including an estimated 67 per cent increase in national insurance contributions.
UK Hospitality, the industry body, has calculated that the annual cost of hiring a full-time worker on the national living wage will rise by £2,526 from 2025.
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Martin said that while the extent of increased costs was making it more challenging to forecast the group’s performance, he was confident of a “reasonable outcome” for the year.
Wetherspoons made a strong start to the year as it reported a 5.9 per cent increase in like-for-like sales for the 14 weeks to November 3, keeping its performance above that of the sector for a 25th consecutive month.
Like-for-like drink sales and food sales both rose by 5.7 per cent, while fruit machine sales, a comparatively small part of the business, were up 13.5 per cent. Income from its hotel rooms dipped 2 per cent. The disposal of a small number of pubs meant that total sales for the period grew 4.6 per cent.
Roberta Ciaccia, an analyst at Investec, said: “Given the limited extent of price increases implemented over the past year, we can comfortably assume that most of the performance was driven by volume.”
She believes that Wetherspoons could “easily implement some price increases, given its price differential with peers”.
Martin founded the business in 1979 on the site of a former betting shop in Muswell Hill, north London. It had 44 pubs at its flotation in 1992 and the portfolio has since grown to 797 sites around the country, from Penzance to Inverness.
So far this year it has opened two new pubs, in Buckinghamshire and Waterloo station, and aims to open nine in total by the end of the financial year, including at Manchester Airport.
The shares rose 18p, or 3 per cent, to 616p in morning trading.