Wetherspoon's plan for two new pubs in Northern Ireland unaffected by slowdown
A slowdown in sales at pub chain JD Wetherspoon is unlikely to affect the company's plans to expand in Northern Ireland, chairman Tim Martin has said.
The company, which has more than 900 pubs including nine in Northern Ireland, said like-for-like sales were about 2% higher in December and had slowed further over the last fortnight, compared with a 6.3% growth rate reported in November.
But Northern Ireland-born Mr Martin said its plans for two new pubs in Belfast were unlikely to be hit.
"It's unlikely it will have any impact on our plans to expand," he said. "Sales have been pretty resilient in Northern Ireland and it's only a slowdown from record levels.
"It's all part of what I've referred to before as the bio-rhythms of the pub trade."
Mr Martin also said he hoped to hear in three to six months about the company's application for planning permission for its new city centre pub. However, other pub traders already operating in the area are expected to oppose the granting of a licence at the former JJB shop on Royal Avenue which has been bought by the firm for conversion into a pub.
Wetherspoon also bought a disused Methodist Church on University Road last year for around £1.2m. It has also opened two new pubs in the Republic, in Dun Laoghaire and Blackrock, and plans to have around 30 altogether south of the border.
But he said he felt pub businesses in Northern Ireland were at a disadvantage compared to the Republic, where VAT was 9% in a special concession to the hospitality industry, compared to 20% in the UK.
He has also campaigned for the abolition of VAT on food served in pubs.
UK-wide, margins were under pressure too following last year's above-inflation 5% increase in pay for staff and a rise in utility and supplier costs.
The company is also being squeezed by increased price competition from supermarkets, with drink-led bar sales flat in the past two months.
Mr Martin said: "Wetherspoon has had significantly better sales growth in the last couple of years than our competitors, reflecting a pattern that has continued since our flotation.
"Even Wetherspoon, however, has seen flat bar sales in the last two months. Inevitably, bar sales in the industry as a whole, especially where pubs have not benefited from Wetherspoon's level of investment, will have fared less well.
"This situation reflects the dire need for the pub industry to campaign for equal tax treatment for pubs and supermarkets.
"It is certain that the current wave of pub closures, which continues at a high level, will accelerate when economic growth slows or reverses."
The company said it continued to expect a "broadly satisfactory outcome" for the financial year to July, although brokers at Peel Hunt responded to the update by cutting their pre-tax profit forecast by 4% to £77.6m. This is below the £79.4m reported last year. Shares fell 2%.