Wetherspoons sales drop as older customers make fewer visits

Pub chain JD Wetherspoon reported a drop in sales on Wednesday versus pre-pandemic trading, as its older, more cautious customers made fewer visits to pubs.

In the 15 weeks to 7 November, like-for-like sales were 8.9% lower than the r­­ecord sales achieved in the same period in 2019. Still, this was an improvement compared to the last 10 weeks of the previous financial year, when sales fell 17.8%.

Bar sales declined 9.6%, while food and fruit/slot machine sales were down 8.1% and 12.3%, respectively. Hotel sales were up 11.5%.

The company said there has been a "considerable" increase in sales of the range of drinks often consumed by younger customers, such as cocktails, vodka and rum. However, draught products, more often consumed by older customers, have been under pressure, with traditional ales down by 30% and stout down 20%.

Wetherspoons said food volumes appear to have been hit by some customers working from home, with breakfasts, for example, down 22% and coffee 30% lower.

It also said that contrary to some forecasts - including its own - trade has been positive in the centre of many, but not all, larger cities and towns, but negative in the suburbs.

Chairman Tim Martin said: "With no music in Wetherspoon pubs (apart from 46 trading as Lloyds), a material proportion of our trade comes from older customers, some of whom have visited pubs less frequently in recent times.

"As outlined in our annual report, published in October 2021, there have been no outbreaks of Covid-19, as defined by the health authorities, among customers in Wetherspoon pubs.

"However, some customers have been understandably cautious. Improvement in trade will therefore depend, to some extent, on the outlook for the Covid-19 virus."

As far as supply chain issues are concerned, Wetherspoons said it has had "some problems from time to time", but they have usually related to a minority of items for which the company has been able to find alternatives.

"Overall stocking levels of bar and food products have been in line with previous years. The problems have eased in recent weeks, albeit that the busy Christmas period is yet to come."

At 0845 GMT, the shares were down 3.9% at 988.99p.

Laura Hoy, equity analyst at Hargreaves Lansdown, said: "JD Wetherspoon’s seen a shift in its patrons as the pandemic weighs on confidence among the group’s older and more vulnerable clientele. Sales of drinks popular among younger customers have risen while the draughts favoured by more seasoned pub-goers are on the decline. Wetherspoons tends to cater to the latter group, so a permanent shift in that direction could be bad news.

"More likely is an abundance of caution among vulnerable populations as Covid continues to spread despite vaccine efforts. This attitude should wane as the pandemic comes under control, but there’s no telling how long that will take.

"On the bright side, Wetherspoon noted that supply chain issues have been largely inconsequential for the pub chain and the tightness they have experienced has started to ease in recent weeks. On a similar note labour shortages haven’t had much of an impact on hiring.

"There were few surprises in the numbers from Wetherspoon today, though the shift in clientele is something to keep an eye on for signs it could become a longer-term headwind."