Pub chain JD Wetherspoon has warned over annual losses after hiking staff wages and ramping up spending on repairs and marketing amid a slow recovery in bar trade.
The group said it is now expecting losses of around £30 million for the year to the end of July after investing to attract and retain workers and on the wider business.
Wetherspoon - which has more than 800 pubs across the UK and Ireland - had previously said in May that it expected to break even over the full year, having cheered a return to profit in March.
The alert sent shares in the group falling sharply, down more than 5% in morning trading on Wednesday.
It comes as the group said the recovery for many pub firms had been "slower and more laborious" than expected, while the sector is also grappling with soaring costs and a pull-back in consumer spending due to rising inflation.
Wetherspoon's latest trading update showed that like-for-like sales in the first 11 weeks of its fourth quarter to July 31 were 0.4% below the same pre-pandemic period in 2019 - an improvement on the previous quarter, when they fell 4%.
Sales of draught ales, lagers and ciders - previously the biggest driver of pub trade - were 8% below 2019 levels, it revealed.
"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 was anticipated," the group said.
Wetherspoon said staff costs were far higher than before the pandemic, with firms across the sector having to increase wages to overcome recruitment difficulties.
It added that it is now "with minor exceptions, fully staffed".
Repair costs have also soared, with the group saying it will have spent about £99 million on this in the current year, compared with £76.9 million in 2018-19, due to "catch-up" work since Covid restrictions lifted.
Chairman Tim Martin said: "Wetherspoon has tried to take a long-term approach to these issues, investing heavily in the workforce, in buildings, in marketing and in contracts with landlords and suppliers, which will hopefully create a solid base for future growth.
"The company remains cautiously optimistic about future prospects."
Matt Britzman, equity analyst at Hargreaves Lansdown, said: "It looks like the older demographic's still cautious to get out and about and that comes through in the numbers."
The Drovers Inn at Loch Lomond sold
DROVERS Inn in Invernan at Loch Lomond, which has been on the same site for more than 300 years, has been sold from an asking price of offers over £3 million to the Bruce Group.
The T-shirts worn by staff and sold to customers say it was voted “Scottish Pub of the Year 1705”, a spokesman for Shepherd Chartered Surveyors, which handled the sale, noted.
Sharp decline in office take-up in Scottish capital
THE Scottish capital’s office take-up declined sharply in the last quarter, while there was an increase in leases in Glasgow, new figures show.
Office take-up in Edinburgh totalled 87,168 sq ft in the second quarter, which was down 45 per cent from the same period in 2021 and down 65% against the five-year second quarter average of 251,458 sq ft.
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