Wetherspoon’s sales below pre-Covid levels as older customers stay away
Shares fall despite pub chain pointing out 2019 had been a record year and reporting signs of recovery
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Last modified on Wed 10 Nov 2021 16.45 EST
Wetherspoon’s has suffered a slump in sales below pre-pandemic levels, which the pub chain’s chairman, Tim Martin, blamed on older customers staying away because of lingering caution about the danger of Covid-19 infection.
In the first 15 weeks of the financial year, sales were 8.9% below the same period of 2019, the last comparable period when trade was unaffected by coronavirus-related restrictions.
Shares in JD Wetherspoon fell 4% in early trading despite the 860-strong pub chain pointing out that 2019 had been a record year for sales and highlighting signs of recovery in some parts of the country, particularly outside London.
Wetherspoon’s said detailed figures on which drinks were selling well indicated that youngsters were flocking to the pub, while its more mature clientele were opting to drink at home instead.
Sales of cocktails were up 45%, vodka rose by 17% and rum was up 26%. The pub chain said these drinks were all popular with younger people.
Draught products, which Wetherspoon’s said were more often consumed by older customers, have been under pressure, with traditional ales down by 30% and stout down by 20%.
Martin, who has been an outspoken critic of the social mixing restrictions that have hampered pub trade for much of the pandemic, said older customers had “understandably” been wary of going to the pub.
Laura Hoy, an equity analyst at Hargreaves Lansdown, said the company could suffer in the event of a long-term trend towards younger patrons and away from its older regulars.
“Wetherspoon’s tends to cater to the latter group, so a permanent shift in that direction could be bad news,” she said.
“More likely is an abundance of caution among vulnerable populations as Covid continues to spread despite vaccine efforts. This attitude should wane as the pandemic comes under control but there’s no telling how long that will take.”
Wetherspoon’s put an 8.1% slump in food sales down to more people working from home and eschewing the allure of its breakfasts, down by 22%, and its coffees, down by 30%.
With office workers staying away, the worst affected region was London, down 17.4%, offsetting relatively buoyant trade in cities such as Liverpool, Newcastle, Nottingham and Oxford, where sales were up 11.3%.
Lingering travel restrictions meant that trade was significantly lower in airports, down 38.8%, stations, down 22.4%, while sales also fell in Scotland (-12.2%) and Northern Ireland (-11.0%), where some restrictions still apply.
“With no music in Wetherspoon pubs (apart from 46 trading as Lloyds), a material proportion of our trade comes from older customers, some of whom have visited pubs less frequently in recent times,” Martin said.
“As outlined in our annual report, published in October 2021, there have been no outbreaks of Covid-19, as defined by the health authorities, among customers in Wetherspoon pubs.
“However, some customers have been understandably cautious. Improvement in trade will therefore depend, to some extent, on the outlook for the Covid-19 virus.”
Martin has been a vocal backer of Brexit but the pub chain he founded suffered shortages of some beers earlier this year, amid a shortage of delivery drivers partly caused by the UK’s exit from the EU.
The company said it had experienced problems “from time to time” but that the problem had eased in recent weeks, albeit with the caveat that the hectic Christmas period was yet to come.
Wetherspoon’s also said it had not suffered badly from a difficulty across the hospitality sector in finding staff. The number of employees has increased from 36,987 when pubs reopened in April 2021 to 42,240 today, it said.
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