Barclays thinks it will be difficult for JD Wetherspoon PLC (LON:JDW) to continue to grow like-for-like sales, although the value pub chain’s new initiatives give it at least a fighting chance.
Analysts have heaped praise on the “strong” culture of innovation at the company, pointing in particular to its order and pay app and, more recently, its rollout of pizza across its 900 pubs.
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“Achieving similar levels of like-for-like sales growth going forward (4.4% average since FY13) will be challenging, but the company driven initiatives are encouraging,” read a short note to clients.
Barclays also highlights ‘Spoons’ ability to retain its top-level pub staff as another plus point, with managers now averaging 12 years in the job, compared with nine years in 2012.
Although it is renowned more for its cheap beer than its food offering, ‘Spoons ranks number three in food hygiene ratings, putting it ahead of most restaurant-focused chains and on par with Waitrose and Pret A Manger.
“There may be bumps in the road but we continue to believe that in the long term, happy customers and staff should continue to ensure happy shareholders,” read the note to clients.
Barclays retained its long-held ‘overweight’ rating on the stock – a ‘buy’ to you and me – as it upped its price target to 1,450p, some 12% higher than where the stock currently sits.
‘Spoons’ shares were up 1% to 1,304p on Thursday morning.