21st Jan 2015 07:40
LONDON (Alliance News) - British pub chain JD Wetherspoon PLC Wednesday said sales growth has slowed in recent weeks, while its operating margin for the first half of the year will be slightly lower than the year before, due to increases in staff pay and supplier costs.
JD Wetherspoon said like-for-like sales for the first 12-weeks of its second quarter to January 18 were up 2.8%, while total sales grew by 6.8%.
However, the group said like-for-like sales slowed to around 2% in December and and slowed even further in the past two weeks.
"Wetherspoon has had significantly better sales growth in the last couple of years than our main competitors, reflecting a pattern that has continued since our flotation. Even Wetherspoon, however, has seen flat bar sales in the last two months, when food sales have continued to rise," said Chairman Tim Martin in a statement.
The pub chain said it expects its operating margin, before any exceptional items, for the half year to January 25 to be around 7.3%, down from 8.2% in the first half of last year.
"This reduction is mainly due to an above-inflation increase in pay for staff and an increase in utility and supplier costs. In addition, gross margins are under pressure as a result, we believe, of increased price competition from supermarkets," said Martin.
"Although the reduction in sales growth may have an impact on our operating margin if the trend continues, the company is aiming for a broadly satisfactory outcome in the current financial year," he added.
The group said it will release its interim results on March 13.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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