Tim Martin, the politically outspoken boss of pub chain JD Wetherspoon, praised the economic “pedigree” of the new Labor chancellor as he called for tax changes to help the struggling hospitality sector.
Martin regularly publishes economic and political commentary alongside his company’s results and has previously expressed support for Brexit and Boris Johnson.
But he made overtures to Rachel Reeves on Wednesday, accusing the previous government of failing to ease the tax burden on the struggling hospitality sector.
“The last government failed to introduce tax parity between pubs and supermarkets, leading to pub closures and under-investment,” Martin said.
“Wetherspoon hopes the current chancellor, with Bank of England pedigree, will understand how many beans make five and correct this inequality.”
Martin has often lamented the fact that 20% VAT is levied on food sold in pubs but not in supermarkets, which he says unfairly allows thriving shops to subsidize artificially low beer prices at the expense of the struggling hospitality sector.
More than 500 pubs are set to close in 2023 as the industry struggles with higher energy, rent and labor costs, according to figures from the British Beer and Pub Association.
While many pubs are still struggling to recover from the Covid-19 pandemic restrictions, which Martin heavily criticized for being tougher on pubs compared to other sectors, JD Wetherspoon’s 801 outlets are consistently outperforming their rivals.
The company saw further revenue growth in the 10 weeks to July 7, a period that includes most of the Euro 2024 football tournament.
Sales were up 5.8% in the period and 7.7% in the previous year, a period in which the company closed 26 underperforming pubs and opened just two new ones.
“Pub sales are around 21% higher than pre-pandemic, which has helped offset a very substantial increase in costs,” said Martin.
He cited a list of cost increases since the pre-pandemic 2019 financial year, including a £164m increase in labor costs, £28m in energy, £38m in repairs and interest costs on loans, which rose by £16m.
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The pub company sought to increase sales by introducing beer gardens, staff rooms, glass stands above the bar and improved beer tap systems. It expects profits to be in line with market expectations, suggesting a profit for the year of around £75m.
“These numbers don’t just happen on their own,” said Derren Nathan, an analyst at investment firm Hargreaves Lansdown.
“Wetherspoon consistently outperforms its peers and continues to invest in measures to improve delivery times and customer experience. This has helped it mitigate the inflationary onslaught on its cost base.”
He said an England victory in Wednesday night’s Euro 2024 semi-final against the Netherlands, which would have secured the team a place in Sunday’s final, could provide “one last spurt” before the end of the financial year.
Fellow leisure analyst James Wheatcroft of Jefferies said he expected Wetherspoon’s to benefit from customers “dropping in” due to lower prices, along with good locations and investment in the pubs themselves.