Trading at Wetherspoon has been slightly better over the past quarter versus the previous three months, but year-on-year sales growth rates are still negative.
It appears customers want the pie but not the pint. The biggest surprise was a big slump in sales of draught ales, lagers and ciders, which perhaps suggests that people are watching their wallets and making fewer visits to the pub for a casual drink with family and friends.
“Interestingly, there is a contrast with suburban café-bar-restaurant operator Loungers, which doesn’t seem to share the same plight as Wetherspoon. Its sales since mid-April have shot up and Loungers says there is no sign of customer behaviour changing,” says AJ Bell financial analyst Danni Hewson.
“One might expect Wetherspoon to benefit from customers trading down from posher pubs and looking for somewhere with cheaper bar prices. In times of economic hardship, one would have also thought pubs would still pick up custom from individuals finding solace in a pint to drown their sorrows.
“So, what can Wetherspoon do to shift more pints? Beyond slashing prices to the bone and stomaching razor thin margins, it’s hard to see any radical options for the business which would be approved by Tim Martin. He’s always been a fan of sticking to the same model regardless of what’s happening in the world, and simply waiting for trading to pick up again.”