British pub group JD Wetherspoon has today reported a surge in its adjusted pre-tax profit for the first-half of its fiscal year, supported by sustained demand for food and drinks amid rising disposable incomes among younger consumers.
However, rising labour costs and waning consumer spending could dampen prospects for the year ahead.
The UK government’s budget in October, which raised taxes and labour costs for employers, has fuelled fears of product prices being raised and jobs being cut to counter the higher expenses, hampering consumer spending.
The British pub chain reported adjusted pre-tax profit of £41.2m for the six months ended January 26, up 58.2% from £26.1m a year ago.
Wetherspoon, which employs about 42,000 workers, reiterated it expects the hikes to wages and national security contributions to add about £60m a year, or £1,500 per pub, per week, to costs.
“The company currently anticipates a reasonable outcome for the financial year, subject to our future sales performance,” Wetherspoon Chairman Tim Martin said in a statement.
Many British pub groups, including Wetherspoon, enjoyed higher footfall, especially over the festive period of 2024.
Consumer morale in the country also ticked higher for a second month running in March as people turned a little more optimistic about the economic outlook, although less so over their own finances, a survey showed today.
“There are clearly signs of further progress for Wetherspoon, but a weaker wider market and the moribund outlook for the UK economy have brushed any positives aside,” said Richard Hunter, an analyst at interactive investor.
