Pubs chain JD Wetherspoon is to slow the pace of its expansion amid sustained cost pressures and slower sales so far this year.
The group, which ended January with 841 pubs, intends to reduce its number of openings to around 40 in the year to the end of July, compared with previous expectations for a figure of around 50.
The caution also reflects its anger over the prospect of more alcohol duty hikes in this month’s Budget. Including VAT, employee contributions, corporation tax and other duties, Wetherspoon said its tax burden increased to £250.1m or 43.9 per cent of sales in the six months to January 22, compared with £225.7m or 43 per cent in the same period a year earlier.
The group reported an 11 per cent rise in pre-tax profits to £35.8m for the half year today but said that sales since then have been disappointing.
Revenues on a like-for-like basis declined 0.7 per cent in the six weeks to March 4, while profit margins are set to fall due to continuing cost pressures.
Chairman Tim Martin said: “We are, therefore, slightly more cautious about the potential outcome for the current financial year.”
He renewed his attack on the current tax regime, in particular that supermarkets are able to cross-subsidise drinks prices because they do not face the same burden on food as pubs who pay 20 per cent VAT.
Mr Martin said: “This tax, and hence price, disparity has been felt more acutely in less-well-off areas of Britain, where price disparities matter more - and the number of closed pubs in these locations is clearly evident.”
He added: “Over the next few months we will review our plans for pub openings in future financial years, taking account of our concerns for the tax regime on pubs.”