(Reuters) – Britain’s J D Wetherspoon warned of losses this year as costs for labour, repairs and marketing eat into its bottom line, and said ‘natural beer drinkers’ belonging to an older population were staying away from pubs, hurting its sales.
The pandemic-hit pubs, whose numbers have hit a record low in England and Wales, have been struggling with costs, lower consumer spend and increasing competition from supermarkets.
The recovery in pub sales for many companies had been “slower and more laborious” than expected, Wetherspoon said.
A fall in beer sales from 2019 levels can probably be attributed to working from home, people stepping out less during the day, and health concerns among older people, Wetherspoon Chairman Tim Martin told Reuters.
Martin has been an outspoken critic of Britain’s handling of the pandemic and believes the long-term challenge for the pub industry continues to be the tax disparity with supermarkets.
“The difficulty now, for the entire pub sector, is that drinking and eating at home looks to be sticking around longer than first thought,” Hargreaves analyst Matt Britzman said.
Wetherspoon, owner and operator of over 800 pubs in the UK and Ireland, said sales of draught ales, lagers and ciders, once its largest contributors, were 8% below 2019 levels.
“When pubs were closed people probably got used to staying in. We’re probably more inclined to be creatures of habit than we realise,” Martin said.
Often referred to as “Spoons” by its younger clientele who consume more spirits and cocktails, Wetherspoon said its like-for-like sales for 11 weeks of its fourth quarter to July 31 were 0.4% lower than in the same period of 2019.
The company, which is fully staffed barring minor exceptions, said it has contracts for energy supplies until the end of 2023 at fixed prices to battle the spike in energy costs.