JD Wetherspoon sales lift as budget chain ‘one of few winners’ amid economic crunch
JD Wetherspoon posted buoyant sales for the first quarter, although it said demand had softened slightly in October.
Shares dropped by as much as eight per cent, after the company admitted October trading had been slightly slower than expected.
Like-for-like sales were 9.6 per cent higher than the same period last year, with the pub chain benefiting from a return to pre-pandemic habits as widespread fears over Covid have alleviated.
The chain, which is known for its cheap drinks and meals, will be hoping to entice punters who are keen to trade downwards amid the economic crunch.
In a note to investors on Wednesday morning, banking and wealth management group Investec said it felt the London-listed group was “one of the few long-term winners even in the current cost of living crisis.”
The pub operator reported a return to positive cash flow in the 2022 financial year and anticipates a positive cash flow in the current year.
Costs, particularly for labour, food and repairs, were “substantially higher” in the most recent quarter, the FTSE-250 company said.
The company said it would be selling an additional seven pubs, alongside a previously announced sum of 32 that have been put on the market. These are mostly sites that are “in close proximity” to existing sites.