October 25 2014 Latest news:
By shaun Lowthorpe
Sunday, September 16, 2012
Pub chain JD Wetherspoon said it was eyeing up opening new outlets in Cromer, Diss and Lowestoft as part of a strategy to grow its business in market towns as it cheered an Olympic boost to sales.
The group, whose 860 mainly town-centre pubs screened the London 2012 Olympic and Paralympic Games, saw like-for-like sales in the six weeks to September 9 jump 8.4pc, with total sales up 12.8pc. This compares with 6.1pc growth in the 11 weeks to July 8.
But the Watford-based group, which has nine pubs in Norfolk, including the newly opened Red Lion in Thetford, and whose range of local beers on tap includes Woodforde’s, Adnams and Panther, said the level of growth would not continue as taxation and input costs are expected to rise, and maintained its forecast of a “reasonable outcome” for this financial year.
The update came as Wetherspoon reported an 11.7pc rise in revenues to £1.2bn in the 53 weeks to July 29 and a 4.1pc drop in pre-tax profits to £58.9m.
Chief executive John Hutson said the strong performance was down to three factors – its own efforts to raise its own standards, the boost felt by one-off events including the Diamond Jubilee, Euro 2012, and the Olympics and Paralympics, and the wet weather which he said had encouraged people to pay a visit to the pub because they could not enjoy a summer barbecue.
He said Wetherspoon had identified new sites in Cromer, Diss, and Lowestoft and was looking for more sites in the region.
“At Fakenham we are going to go on site soon and we have opened in Thetford, and there will be other opportunities coming along,” he added.
But he warned that many pubs would face going out of business unless the government acted to cut the VAT disparity between pubs and supermarkets.
The group reported a 3.2pc increase in like-for-like sales for the year to July, within which bar sales increased by 2.8pc and food sales rose 4.8pc.
The company opened 40 pubs during the year, 18 of which were freehold, while three others closed, resulting in a total estate of 860 pubs at the financial year.
It said the average development cost for a new pub, excluding the cost of freeholds, in the financial year under review, was £1.4m, compared with £1.2m a year ago. And it intends to open about 25 pubs in the year ending July 2013.
Tim Martin, founder and chairman of JD Wetherspoon, reiterated his warning over the difference in VAT between supermarkets and pubs and other rising taxes.
He said: “The biggest dangers to the pub industry are the VAT disparity between supermarkets and pubs, combined with the continuing imposition of stealth taxes, such as the late-night levy and the increase in fruit and slot machine taxes.”
A £2m plan to transform Palmers department store in Dereham and a neighbouring eyesore into an upmarket supermarket and clothing shop has been confirmed.