JD Wetherspoon has announced that it expects to “make a loss” for the year ended 25 July 2021.
In a pre-close trading update,the group revealed that two-year like-for-like sales from 17 May to 4 July were down 14.5%.
It also saw bar and food sales decline 49%, when compared to FY19 levels, between 12 April and 16 May 2021.
As of 4 July, 850 of the pub group’s 860-strong portfolio were open, while net debt currently sits at £865m.
Tim Martin, chairman at Wetherspoon, said: “The company continues to expect to make a loss for the year ending 25 July 2021.
“In a trading update of 19 January 2021, the company’s principal ‘scenario’ estimated sales in the financial year starting 26 July 2021 to be in line with financial year 2019, which remains our current best estimate, on the basis that restrictions are ended, as the government currently intends.”
Elsewhere in the update, the group claimed that it will increase its food prices by 40p a meal, should the interim VAT rise to 12.5% take place in September 2021.
Wetherspoon hit out at the “undoubted unfairness” of supermarkets paying zero VAT on food, while pubs and restaurants pay 20% in normal circumstances.
Wetherspoon claimed that although the current VAT rate sits at 5% for the hospitality sector, the proposed VAT return to 20% in stages over the next year will make the industry “less competitive vis a vis powerful supermarkets”.
The group’s preliminary accounts for the year ended 25 July 2021 are expected to be released on 1 October 2021.