Pub giant JD Wetherspoons has said its recovery has been slower than expected and warned food prices will rise if VAT returns to 20%.
Chairman Tim Martin told Propel the business is ‘having to graft for every penny’.
The chain operates three pubs in Gedling borough
Martin also said if VAT goes back to 20% as planned next month, the company will have to put up its food prices and did not rule out further increases this year.
He also again called on the government to create tax equality between pubs and supermarkets.
Speaking following the company’s half-year results, Martin said: “I suspect volumes are down across the pub trade overall, although restaurants, music-oriented pubs and some pubcos are producing good results.
“Most commentators, including us, predicted a boom after restrictions ended, but we’re having to graft hard for every penny. The supermarkets, using their massive tax advantage, are trying to keep the trade they won in lockdowns. If Rishi Sunak has any sense he’ll create tax equality between pubs and supermarkets. It’s the only way to revive high streets and town centres, especially in less well-off areas where the price differential is driving people to the off trade.
“If VAT increases to 20% in April, on-trade food prices, including ours, will be going up, whereas mighty supermarkets, who’ve made hay in the pandemic, won’t be getting a VAT increase – crazy, but true.”
Martin said further investment in its pubs and future openings “depends on trade and a continuing absence of restrictions”.
He added: “Provided trade returns to normal, we hope to open 20 to 30 new or redeveloped pubs per annum, as a rough guide.”
In terms of trends, Martin said “shooters”, flavoured vodkas and cocktails are “growing like mad”, but traditional ale is “struggling”.
