Tim Martin dispels 'urban myths' surrounding Wetherspoons as sales rebound at pub giant
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The group’s vocal chairman Tim Martin, who founded the chain in the late 1970s with a single pub in Muswell Hill, London, said an “urban myth, sometimes repeated by City analysts”, was that Wetherspoons does not attract customers in higher income groups. However, he pointed to a recent survey by market research outfit CGA which indicated that the average income of the pub group’s customers was 7 per cent above that of the average “high street pub consumer”.
In a section accompanying the firm’s latest trading update, headed “price, quality and myths”, Martin also addressed the assumption that because Wetherspoons’ prices were lower than average, quality or service standards would also be below average. He noted that over 99 per cent of the chain’s pubs had gained the Cask Marque accreditation for beer quality while they also had the best results of any “substantial hospitality company” in respect of local authorities’ “scores on the doors” schemes, which are designed to reflect adherence to cleanliness and health legislation. The chairman, who has built the business up to span more than 800 pubs, including the likes of the Caley Picture House in Edinburgh and Dunfermline’s Guildhall & Linen Exchange, also pointed out that the group had recently been recognised as a top UK employer by the independent Top Employers Institute, for the 18th time.
Meanwhile, Wetherspoons confirmed that 22 of its pubs remain up for sale after offloading 28 already so far this year as part of an overhaul of its estate. It denied the move was a “money-raising exercise” amid tougher trading conditions, insisting that “almost all” of the sales were in areas where it has another pub nearby. The move comes after the firm warned last September that 32 pubs were being put up for sale due to a “commercial decision”. But in its latest update, it said it was a “misinterpretation” to suggest the move was down to difficult trading conditions.
It came as the group notched up another double-figure hike in sales and said it was being boosted by easing energy costs. The firm saw sales lift 11.5 per cent year on year in the 10 weeks so far of its final trading quarter and are up 12.9 per cent in the financial year to date.
Compared with pre-Covid trading in 2018-19, sales in the fourth quarter so far are 11 per cent higher. It said profits for the year to July 30 are set to be in line with market expectations, having improved its outlook in May.
Martin told investors: “As a result of a continued improvement in sales and a slightly reduced expectation for cost increases, for example energy costs, the company anticipates an improved outcome for the next financial year.”
Richard Hunter, head of markets at investment platform Interactive Investor, noted: “Despite the clear damage wrought by the pandemic, Wetherspoons has weathered the storm and is now returning to a more robust financial position.”
Danni Hewson, head of financial analysis at AJ Bell, added: “Wetherspoons’ mix of decent quality beers, food and keen prices is likely to stand it in good stead.”