UK pub chain Wetherspoons announces first profit since the pandemic and has credited a surge in food sales and reduction in costs for its first annual profit since the COVID pandemic.
Although food sales were a major factor behind the revenue rise the business still saw bar sales increase by 9%, which helped the ‘value’ pub and hotel chain report profit before tax for the year to the end of July 2023 of £42.6m, compared to a loss of £30m in the previous financials.
Like-for-like sales from its 826 sites across the UK and Ireland rose by 12.7% and total sales by 10.6% to £1.92bn.
The pub, hotel and wider hospitality sector was hit particularly throughout Covid, firstly by the restrictions to trade and then by a general malaise in the night time economy. COVID restrictions forced sites into temporary hibernation for weeks at a time on several occasions and when combined with surging costs to ingredients and energy, enforced wage increases combined with staff shortages, it is a considerable turnaround that Wetherspoons announces first profit since covid, considering the continued trading conditions.
Loss of UK Pubs
It is quite staggering that a total of 13,000 pubs were lost during 2020 and 2021, with a further 450 going last year according to British Beer and Pub Association (BBPA) data. The current pub closure rate is expected to be approx 2 per day and unless conditions improve will likely see close to another 1,000 disappear this year.
Although the ‘value pub’ Wetherspoons business model has enabled the business to return to profit, the business has had to streamline in recent years from its peak 951 number of pubs in 2015, down to 826 as of 2024.
Ironically, it wasnt covid that saw the steepest decline in Wetherspoons pub numbers in recent years.
Brexit Referendum & Wetherspoons
Despite Tim Martin being a very vocal ‘Vote Leave’ entrepreneur the pub chain he leads dropped from 951 pubs in 2015 to 895 in 2017, a drop of 56 pubs in just two years and which marked the first drop in pub numbers since at least back to 2007 with a 28 per year closure rate covering the Brexit referendum period.
A piece written by North East Bylines, a not-for-profit regional online newspaper said: “Brexit promoting Tim Martin must take some of the blame for the current crises in food, energy, labour and logistics, that the country is still reeling from. He and his shareholders will have to bear the losses the company has incurred and the many extra costs he will continue to bear. This is due in no small part to the loss of freedom of movement of labour caused by Brexit.“
Indeed, it is true that many European workers left the UK after the 2016 referendum result but on face value, the cost of living and inflation were yet to spiral upwards and was made worse by covid, so the picture isnt clear.
Yet, Wetherspoons pub numbers fell again from 895 in 2017 down to 872 pubs in 2020 and the chain closed a further 23 pubs in those 3 years, at a rate of 7.6 per year, which was less then the year of the referendum result and the year after but records dont show any major reasons reported by the business for its sudden halt in the march of Wetherspoons pub numbers in 2016 and their year on year decline thereafter? If it was down to a scarcity in European workers post referendum, would Martin admit that?
Yet the decline continued. From 872 pubs in 2020 down to 852 in 2022, the chain closed another 20 pubs, seeing the rate of closure increase to some 10 pubs per year during covid, but still not as high as post Brexit referendum.
Lastly, from 852 pubs in 2022 and down to 826 pubs as of 2024, the business closed another 26 pubs, at a rate of some 13 per year. So, again taken in isolation, Wetherspoons pub closure rate post Covid was still not as high as it felt in 2016 and 2017, after the referendum.
Seven years on from the referendum, Martin remains forthright. “Brexit is a vexed issue and there’s probably been exaggerated claims on both sides,” he said.
Whatever the reason for the drop in pub numbers at Wetherspoons you could argue it has been a sign of the times and the same has been felt throughout the wider UK hospitality industry. The news that value pub chain Wetherspoons announced its first profit since the pandemic is a testament of Martin returning the business back to form, which despite his Marmite personal appeal, is surely good for the business, its employees, its customers and its shareholders.
Other Hospitality & Tourism News: Jet2 flights commence from Liverpool John Lennon Airport / London’s tourist economy roaring back to life
READ MORE – London’s tourist economy roaring back to life
The news of London’s tourist economy roaring back to life and returning to pre Covid levels of business comes as a big relief to many Londoners who saw 2020 and 2021 turn London into the sort of ghost town we havent seen since watching Cillian Murphy roam the empty streets in Danny Boyle’s 28 Days Later.
You only have to see the huge rise in the popularity of Walking Tours and London Taxi Tours answering to the increased demand from a newer type of visitor to London. [excerpt]
