JD Wetherspoon reports strong trading conditions in Ireland

UK pub group warns of lower sales and higher costs in second half of the year

Wetherspoon says it expects a “slightly improved” trading outcome for the current financial year compared with 2016

Wetherspoon says it expects a “slightly improved” trading outcome for the current financial year compared with 2016

 

British pub chain JD Wetherspoon, which operates five bars in Ireland, has reported strong trading conditions in the Republic.

Founder and chairman Tim Martin also said the company was hopeful of favourable planning outcomes for its Abbey Street and Camden Street sites, which involve an investment of about €20 million and will create an estimated 200 jobs.

“We’re trading extremely well in the groovy Republic. There have been surprisingly good sales of real ale and imported Heineken and Coors are strong. Customers in Ireland also seem to appreciate a reasonably-priced Wetherspoon caffine fix,” said Mr Martin.

The pub chain, which operates more than 900 pubs in Britain, entered the Irish market in 2013 with ambitious plans to open up to 30 bars locally. However, planning delays and rising property prices have led the group to revise down the number of pubs it intends to acquire.

The group, which currently operates four bars in Dublin and one in Cork city, acquired the Camden Hall property in late 2014. It intends to open a 100-room hotel and pub on the site as part of a €4 million investment.

Planning delays have meant that the bar, and a second one planned for Abbey Street, at premises the company bought in 2015 for €1.5 million, have yet to open.

Mr Martin, who founded the pub chain in 1979, warned that JD Wetherspoon would be stung by significantly higher costs in the second half of the year, adding that it expects sales to slow.

The company said a combination of higher wages, an additional £7 million (€8 million) bill for business rates, a £2 million (€2.3 million) hit from an apprenticeship levy and “cost increases” meant that it remained cautious.

“In view of these additional costs and our expectation that like-for-like sales will be lower in the next six months, the company remains cautious about the second half of the year,” said Mr Martin.

In the first half Wetherspoon said like-for-like sales rose 3.4 per cent and total sales increased 1.6 per cent.

The firm said it expected a “slightly improved” trading outcome for the current financial year compared with 2016, and would increase the level of investment in existing pubs from £34 million (€39 million) to around £60 million (€69million).

Brexit-backing Mr Martin, who has accused European leaders of taking a “bullying” approach to the UK, once again used the company’s trading statement to deliver a diatribe on the state of the nation following the EU referendum.

Deep misunderstanding

He said Bank of England chief economist Andy Haldane calling economists’ forecasts a “ Michael Fish moment” demonstrated a “deep misunderstanding” of the situation.

“Michael Fish’s predictions were a misinterpretation of data on one evening under great time pressure. In contrast, the majority of economists, economic institutions, politicians and intellectuals has consistently misunderstood the implications of the euro, its predecessor the exchange rate mechanism, and the implications of leaving the EU over a period of about 30 years,” said Mr Martin.

“The underlying reason for their catastrophically poor judgment is a semi-religious belief in a new type of political and economic system, represented by the EU, which lacks both proper democratic institutions and the basic ingredient for a successful currency - a government.”

Additional reporting: PA