PUBS group JD Wetherspoon has warned it may have to raise prices this year to combat higher costs and taxation.
The group reported stronger sales growth in the six months to January 23, but cautioned over the impact of rising costs and a “pernicious” combination of increased tax and regulation hitting Britain’s pubs.
The group, which has 54 pubs in Yorkshire, reported an 11 per cent decline in first half pre-tax profits, in line with forecasts.
The improved sales are a result of the company’s value-for-money focus which has enabled it to show resilience in the face of tough trading conditions.
Martin Geoghegan, Wetherspoons’ operations director, said the group has broadened its range recently introducing a number of premium lagers and more healthy, low-calorie meals.
He said that the Yorkshire region has performed well over the period and the group has opened three new pubs in Leeds city centre, Otley and Pudsey.
“Otley and Pudsey are both doing very well,” he said. “Yorkshire people want a clean, comfortable environment and good products at reasonable prices.”
He added that the promotion of Yorkshire products across the region has proved a success.
“In Otley, the pub promoted 20 local ales produced within 20 miles of the pub,” said Mr Geoghegan. “Based on that success our Yorkshire area managers are looking to do more local promotions.”
Wetherspoons is to open a new pub in Ripon in April and has identified sites in Sheffield, Leeds, Wakefield, Withernsea, Garforth, Todmorden, York, Beverley, Hull, Armley, Halifax, Selby, Ilkley and Whitby.
It is looking for more sites in the region.
Like-for-like sales over the six months rose 2.8 per cent in the six weeks to March 6, compared with 2.3 per cent in the half-year to January 23.
Wetherspoons has bucked the trend of declining sales among pub companies in recent years with value-for-money offers such as beer-and-a-curry for under £5 and a pint of bitter for £1.70.
But chairman and founder Tim Martin warned prices are likely to rise in the coming year both at Wetherspoons and across the industry as a whole as cost increases are passed on to customers.
“Unfortunately, I think prices in the trade are bound to go up which is not what customers would like to hear I’m sure,” he said. “Rising food prices and beer prices will affect the pub and catering industries.”
The company made a pre-tax profit of £32.2m in the half year to January 23, down from £36.2m the year before, reflecting higher interest rates after last year’s refinancing.