JD Wetherspoon today reported a surge in sales after the pub chain slashed the price of a pint of beer to 99p.
The company, which has more than 700 pubs, said like-for-like sales in the last two weeks of trading were showing increases of 6.4 per cent, compared with a rise of 2.6 per cent across the first 12 weeks of its second quarter financial period.
JD Wetherspoon announced this month that it was turning the clock back to 1989, the last time draught beer was available for less than £1.
The offer, which includes Greene King IPA and San Miguel lager, has been criticised in some quarters amid fears it could fuel irresponsible drinking and force many traditional pubs to close.
Wetherspoon said it was trying to help those caught in the economic slump.
Chairman Tim Martin added: “We are probably the biggest pubs company for students and pensioners and those two groups in particular have been very keen.
“People also know that they can buy a lot cheaper in Calais or in supermarkets, so it’s a question of whether they come to the pub or not.”
Despite the recent strong trading, Wetherspoon dealt a blow to shareholders today by revealing that it intended to cancel future dividend payments.
With a $140 million (£95.3 million) debt facility due for renewal in September, Wetherspoon said it will also reduce capital expenditure on new openings.
It said: “In normal conditions, a refinancing of the private placement on attractive terms could be relied upon, given our financial performance.
“However, in the present economic climate, a refinancing cannot be taken for granted and the board therefore feels that the measures described are prudent in the circumstances.”
PA