Rugby World Cup a score for Wetherspoon

JD Wetherspoon, at Leeds City Station.
JD Wetherspoon, at Leeds City Station.
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Wetherspoon received a Rugby World Cup boost as sales increased more than 2 per cent in the first quarter, but blamed rising wage costs as its operating margin slumped to 6.2 per cent.

For the 13 weeks to October 25, like-for-like sales were up 2.4 per cent and total sales increased by 6.1 per cent. The pub giant noted that sales were higher in the last six weeks, coinciding with the Rugby World Cup.

However, it blamed rising wage costs as its operating margin for the quarter fell to 6.2 per cent, compared with 7.7 per cent in the same quarter last year.

It also predicted that net debt at the end of the financial year is expected to be slightly above last year’s total of £601m.

Tim Martin, chairman of Wetherspoon, said: “As we indicated in September, it is difficult to quantify exactly the factors which will influence our trading performance in the early stages of a financial year.

“Increased labour costs are clearly an important factor for all pub and restaurant companies and may result in our annual profits being slightly lower than the last financial year. We will provide updates in our regular statements.”

Mr Martin has been an outspoken critic of the living wage, which will be phased in from next April and means staff must be paid at least £7.20 an hour for over-25s, rising to £9 by 2020.

He claimed in the summer it would add “considerable uncertainty” to the under-pressure pub sector, and put them at an even greater disadvantage compared with supermarkets, as the industry already shoulders significant staff costs.

Staff costs make up around 25 per cent - or 75p - of every pint sold for an average of £3 in pubs, according to Wetherspoon.

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