JD WETHERSPOON watched its shares take a sharp decline as it updated the City that rather than breaking even this year it is facing a £30 million loss.

It pointed to rising staff wages and increased spending on repairs and marketing amid a slower recovery in bar trade in many places.

The pub giant said it is now expecting loss for the year to the end of July, as it also moves to invest to attract and retain workers and on the wider business.

Wetherspoon - which has 70 pubs in Scotland - had previously said in May that it expected to break even over the full year, having cheered a return to profit in March.

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.

The firm said: “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.”

READ MORE: Wetherspoon signals hope for a ‘return to relative normality’ next year

Wetherspoon’s latest trading update also 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, which was 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 said.

However, contrary to expectations, sales in major city centres, have been stronger than suburban locations and smaller towns.

It noted that Glasgow, the only Scottish city included in its list, recorded an 8.5% sales rise over the period.

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”.

READ MORE: Wetherspoon hikes the price of a pint in pubs across the UK

Repair costs have also soared, with the group saying it will have spent about £99m on this in the current year, compared with £76.9m in 2018-19, due to “catch-up” work since Covid restrictions lifted.

Tim Martin, Wetherspoon chairman, 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."

He added: "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.

“Lagers and ales were replaced by spirits and cocktails as sales in lively city locations, with music on the weekends, performed much better than quieter, suburban, pubs.

“The difficulty now, for the entire pub sector, is that drinking and eating at home looks to be sticking around longer than first thought.

“That trend’s likely to continue, as the cost-of-living crisis looks poised to accelerate the tightening of purse strings.”

Julie Palmer, partner at Begbies Traynor, said: “Just when Wetherspoon’s needed the public to get back to pre-Covid lifestyles of eating, drinking and being merry to restore its finances to levels enjoyed before coronavirus, the cost of living crisis is ravaging personal finances and cranking up the pressure.

“Total revenues edged lower compared with pre-pandemic times, and tellingly, sales of pints, normally the biggest contributor to turnover, performed particularly badly.”

The chairman “has long campaigned for the Government to cut taxes on pubs to the same levels paid by supermarkets", she said, adding: “It’s no surprise his calls have been repeated today as Mr Martin is finding that drinkers can’t even afford his bargain booze, which is a worrying sign for the whole sector.”

Wetherspoon shares closed down 52.5p, or 8.33%, at 577.5p.