Wetherspoon's Profit Skyrockets 8-Fold to £36M Amid Pandemic Recovery Surge; Bar Sales Soar 12%

By John Lopez

Mar 22, 2024 12:09 PM EDT

The British pub chain Wetherspoon experienced a remarkable profit surge, with pre-tax earnings skyrocketing eightfold to £36 million during the first six months of the financial year.

A report from the BBC tells us that this major jump comes as Wetherspoon continues its recovery from the challenges posed by the Covid-19 pandemic.

Wetherspoon Reports Increase in Overall Sales

Despite a reduction in the number of pubs, Wetherspoon reported a notable increase in overall sales, driven primarily by a remarkable 12% surge in bar sales. The chain's top-selling items included coffee and Pepsi, while food sales and slot machine revenues also grew.

Tim Martin, the founder of Wetherspoon, described the recovery from the pandemic as a "slow three-year slog." Although sales improvements have been noted in the new financial year, the pace has been slower, with profit margins for the six months standing at 6.8%, slightly below pre-pandemic levels.

Wetherspoon has strategically reduced its number of pubs but has seen an increase in sales per pub by about 50%. Looking ahead, the company sees potential for around 1,000 pubs in the UK.

Martin highlighted the significant disparity in tax burdens between pubs/restaurants and supermarkets, advocating for tax equality to revitalize High Streets and proposing a lower VAT rate for food and restaurant sales.

LONDON, ENGLAND - JULY 19: A customer orders drinks at the bar at the London and Southwestern Wetherspoon pub in Clapham on July 19, 2021 in London, England. As of 12:01 on Monday, July 19, England will drop most of its remaining Covid-19 social restrictions, such as those requiring indoor mask-wearing and limits on group gatherings, among other rules. These changes come despite rising infections, pitting the country's vaccination programme against the virus's more contagious Delta variant.
(Photo : Photo by Rob Pinney/Getty Images)

Wetherspoon's Covid Recovery

The chain's resilience during the pandemic can be attributed to its focus on offering value to price-conscious consumers. With cash-strapped consumers seeking better-value food and drinks amid the cost of living crisis, Wetherspoon's low-cost pubs have become increasingly popular destinations.

However, despite the impressive financial results, Wetherspoon's shares fell by 6% as sales growth slowed at the start of the second half of the financial year. Like-for-like sales rose by almost 10% in the first 26 weeks compared to the previous year, but this pace slowed to 5.8% in the subsequent seven weeks.

In response to rising food costs, Wetherspoon recently increased the price of its pints for the second time in six months. Nevertheless, Martin affirmed his commitment to keeping the cost of a Wetherspoon's English breakfast stable for the year.

Looking ahead, Wetherspoon's expansion plans include opening more pubs and expanding existing outlets by adding gardens or increasing customer areas. The company has invested significantly in acquiring freehold properties, with about 71% of its pubs now owned outright.

In recognition of its staff's dedication and hard work, Wetherspoon awarded £21.2 million in bonuses and free shares to employees during the first half of the financial year.