JD Wetherspoon chairman Tim Martin has warned that rising wages and taxes are “dramatically widening” the price gap between pubs and supermarkets - with government policy leaving many venues struggling to compete.
Martin said a 10% wage rise adds around 15p to the cost of a pint in a pub, compared with just 1.5p in a supermarket, widening the price differential that has already seen pubs lose half their beer volumes to the off-trade since 2000.
In the company’s latest trading update, Martin said: “A further widening of the differential results from pubs paying 20% VAT on food sales, whereas supermarkets pay nothing.
"As investment bank Morgan Stanley pointed out in recent research, pubs have lost 50% of their beer volumes to supermarkets since the year 2000 — price is surely the main culprit.”
He also used the update to repeat his long-running criticisms of government energy and corporate governance policy, arguing that the UK’s failure to invest in nuclear power and its rigid boardroom rules are harming business competitiveness.
“The proposed development of ‘standby’ nuclear power, for periods when wind and solar energy were unavailable, would require the UK to approximately match France's 59 nuclear reactors,” Martin said.
“However, the UK has only nine nuclear reactors today, most of which are due to be decommissioned by 2030.”
On corporate governance, he added: “None of the chairmen of the mega-successful US technology companies (Microsoft, Apple, Meta, Amazon, Nvidia etc) comply with UK corporate governance guidelines, which include, for example, a ludicrous ‘nine-year rule’. As a matter of common sense, few sensible technology entrepreneurs would envisage a London flotation for this reason alone.”
Despite his criticism of policy, Martin said the company “is pleased with the continued sales momentum but is mindful of the Chancellor's Budget statement later this month and, as a result, is slightly more cautious in its outlook for the remainder of the year.”
In the 14 weeks to 2 November, Wetherspoon reported like-for-like sales up 3.7% and total sales up 4.2% year-on-year. Bar sales increased by 5.7%, food by 0.9% and slot and fruit machines by 8.9%, while hotel room sales fell 6.3%. The company opened four new pubs during the period and plans to open 15 in total this year, alongside the continued rollout of its growing franchise model.