Brexit: Wetherspoon boss claims food prices will fall after UK leaves EU

The pub chain posts strong Christmas sales and says the sugar tax will be a ‘significant cost’

JD Wetherspoon said it remains in a ‘sound financial position’ even though debt is expected to be around £30m higher than at the end of the last financial year (Getty)

JD Wetherspoon said profits were ahead of expectations after better-than-expected sales, but warned that “significant costs” would weigh on its performance over the remainder of the year.

The pub chain said like-for-like sales rose 6 per cent in the 25 weeks to 21 January, with total sales climbing by 4.3 per cent.

Those figures were mirrored in its second-quarter results, on a like-for-like and total sales basis, helping boost profits for the period. The company’s financial year ends on 29 July.

“As a result of better-than-expected sales, year-to-date underlying profit before tax is slightly ahead of our expectations,” the company said, but warned that growth was likely to slow.

“Similar outperformance in the second half will be more difficult to achieve,” it added.

Chairman Tim Martin said: “We face significant costs in the second half in areas which include labour, business rates and the sugar tax.

“There will also be some uncertainty as to the effects on our business of the Fifa World Cup.

“Nevertheless, given better-than-expected year-to-date sales, we currently anticipate a slightly improved trading outcome for this financial year.”

The pub group said it “remains in a sound financial position”, though year-end net debt is expected to be around £30m higher than it was at the end of the last financial year.

It shelled out around £15m on buying the freeholds of pubs where it was previously a tenant and bought £51m worth of shares from shareholders.

As part of its update, JD Wetherspoon said it had opened three new pubs but sold off 10, with plans underway to open approximately 10 pubs by the end of the financial year.

Mr Martin used the latest trading update to launch fresh criticism against two trade bodies – the Confederation of British Industry (CBI) and the British Retail Consortium (BRC) – over their assertion that food prices are likely to rise in the wake of Brexit.

The Wetherspoon boss has been an outspoken proponent of Britain’s divorce from the European Union, issuing countless stock exchange announcements extolling the virtues of Brexit.

“By refusing to acknowledge the fact that food prices will be reduced post-Brexit, if the UK leaves the EU without a deal and Parliament votes to eliminate taxes which are currently imposed on non-EU food imports, the CBI and the BRC are trying to fool the public and MPs and bringing business into disrepute,” Mr Martin said.

“These factually incorrect scare-stories seem to be designed to convince the public that a deal is necessary to avoid a ‘cliff edge’.

“In fact, the cliff edge is a myth. There is almost no action needed, for most companies, if the UK leaves the EU without a deal.”

He asserted that if Parliament takes “sensible steps” that include the scrapping of food taxes, the public would benefit from “lower food prices, from regained fishing rights and from savings of about £200m per week of EU contributions.”

Wetherspoon pubs made headlines this week after customers were left disappointed over a decision to pull steak from its menu on steak night.

A notice, posted on Twitter by a customer, attributed the absence of steak to a “supplier failure”.

PA