D Wetherspoon has revealed its sales are still lagging behind pre-pandemic levels as boss Tim Martin said far more people now drink in their homes rather than in pubs.
The hospitality chain, which runs 844 pubs in the UK and Ireland, said like-for-like sales surged by nearly 18% over the last three months of 2022, when compared with the same period in 2021.
However, sales still remained 2% lower than the equivalent pre-pandemic period in 2019.
People thought that after lockdown there would be a boom in people suffering from cabin fever but, instead, it has almost been the opposite situation as people have got in the habit of staying in
Mr Martin, Wetherspoon’s chairman, told the PA news agency: “The aftermath of the pandemic and lockdown restrictions have been far more difficult than anyone thought.
“That is the picture for the whole pub and restaurant industry. People thought that after lockdown there would be a boom in people suffering from cabin fever but, instead, it has almost been the opposite situation as people have got in the habit of staying in.
“That’s the big thing that means sales are down on 2019. Things are improving now but it’s slow.”
Nevertheless, Wetherspoon said it trumped the wider pub and restaurant sector in December, with sales jumping by a fifth compared with the national average of a 15% increase in the month, according to the Coffer CGA Business Tracker.
“We’re groovy people”, Mr Martin explained to PA.
“Aside from that, we have been trading for a long time and have got very good pubs, which has some benefits.
“But, I wouldn’t say we’ve shot the lights out. At this stage, we might be a little ahead of the pack, but there are others who might be doing better than us.”
Mr Martin was keen to stress that he feels the biggest threat to the hospitality industry is that pubs and restaurants are taxed unfairly, while supermarkets pay no VAT on food sales.
By and large, I think the non-executive directors of the largest pub and restaurant companies prefer to dig their heads in the sand, and not get involved
He said: “This issue has been exacerbated in recent years because supermarkets now trade next to pubs on every high street, and with a huge tax benefit which means they can lower the price of beer.
“By and large, I think the non-executive directors of the largest pub and restaurant companies prefer to dig their heads in the sand, and not get involved.”
Supermarkets now take up about half of the pub industry’s beer volumes, whereas “hardly anyone drank at home” when Wetherspoon’s started trading in 1979, Mr Martin said.
He warned that the industry will “inevitably shrink” relative to supermarkets if it does not campaign strongly for tax equality.
Wetherspoon opened two pubs over the second half of 2022 and sold 10, which made about £2.9 million, and 35 pubs remain up for sale.
Mr Martin added that he is “cautiously optimistic” about the company’s prospects for the financial year.