Wetherspoon to open up to 25 new pubs over the next year

New pubs are planned for London’s West End, Edinburgh, Hessle and West Bromwich. The West End will get two venues.

The chain also plans to open at Barcelona Airport, giving it a second international pub alongside its existing venue in Alicante.

Between five and 10 of the new pubs will be run directly by Wetherspoon in the year to August. Another 10 to 15 will operate as franchises.

The company currently has 797 directly managed pubs and 25 franchised locations.

Sales at comparable pubs rose by 8.2 per cent in the 14 weeks to November 1. Bar sales led the increase, rising by 9.4 per cent, while food sales grew by 6.8 per cent.

However, growth slowed towards the end of the period. Sales rose by 7.5 per cent in the final five weeks, compared with 8.6 per cent in the first nine weeks.

“The company has had a good start to the financial year,” chairman Tim Martin said.

He cautioned that three quarters of the year were still ahead and that “profit forecasts are very dependent on the level of sales growth.”

Nevertheless, Wetherspoon remains “comfortable” with market expectations for full-year profits of £76.4million, covering a 53-week financial year.

That would mark a recovery from the previous year, when pre-tax profits fell by 28 per cent to £58.6million as higher staffing and other costs put pressure on the business.

Six managed pubs have already been launched since the start of the new financial year.

These include sites at Manchester Airport and Heathrow Airport, as well as venues in Crewe in Cheshire, Ferndown in Dorset, Dibden Purlieu in Hampshire and Kempston in Bedfordshire.

Mr Martin used the company’s latest trading update to launch a broadside against Government policies on labour costs, which he argued have tilted the competitive landscape further against pubs and in favour of supermarkets.

According to the company’s own calculations, the labour cost embedded in serving a pint at a pub amounts to £1.68, compared with roughly 15 pence at a supermarket.

“This economic effect has widened the price gap between a pub pint and a supermarket pint in recent decades, which has been a major factor in pubs losing half their beer sales to supermarkets since the millennium,” Mr Martin said.

He added that this disparity had also “resulted in a substantial decrease in employment.”

“The net effect has been to push up the cost of a pint or a meal in a pub relative to supermarkets – and to reduce the number of jobs in the economy,” Mr Martin said.

His comments reflect a long-running grievance within the pub industry that Government decisions on wages and other employment costs disproportionately burden hospitality businesses.

Pubs, which rely heavily on staff to serve customers, are far more exposed to rising labour costs than supermarkets, where a single transaction requires minimal human involvement.

Mr Martin’s analysis suggests that recent Government moves to increase labour costs have widened the gap between the two sectors even further.

Since the year 2000, pubs have lost around half of their beer sales to supermarkets, a shift he attributes in large part to this growing price differential.