The expected post-pandemic pub boom has underdelivered for JD Wetherspoon PLC (LSE:JDW), which warned that it will now make a loss this year.
Like-for-like sales in the fourth quarter were down 0.4% from pre-pandemic levels in 2019, driven mainly by an 8% fall in sales of draught ales, lagers and ciders.
While overall sales were roughly on par with 2019 levels, “labour costs are far higher”, according to a statement from the near-900-pub chain on Wednesday.
The chain was also hit by rising repairs and marketing costs due to a post-pandemic “catch up” element.
As a result of these repairs and lower sales, a £30mln loss after tax is now expected for the current financial year, which the FTSE 250-listed group said was higher than expected, having said in May it “anticipated a 'break-even' outcome for profits”.
Major city centres including Cardiff, Newcastle, Bristol and Glasgow outperformed their suburban counterparts, although the opposite was true for London.
An outspoken critic of the government's pandemic lockdown policies, Wetherspoon chairman Tim Martin said: “The 'fear factor', used by governments to encourage compliance with lockdowns and restrictions, has also had lingering after-effects, with many people remaining cautious about leaving their homes.”
JDW shares opened Wednesday’s trade 5.13% down on the London Stock Exchange.
Year-end results are expected on October 7.