J D Wetherspoon, the pubs company, said yesterday that the price war on the high street which has crippled a number of operators was still raging.
Shares in the company fell more than 5 per cent during the day, after it said sales dropped 0.3 per cent in the first quarter amid tough competition. Margins remain under considerable pressure at the group because other costs, such as utility bills and minimum wage payments, are also rising sharply. Shares closed at 231.75p.
Jim Clarke, finance director, said the company had been changing its pricing policy to act more responsibly, but there was no sign that competition was abating. "Like-for-like sales were pretty flat over the summer, but the marketing campaigns in September have been slower to take off. We have been increasing the price of soft drinks and mineral water, as well as lower alcohol drinks, and we have made double spirit measures twice the price of singles. This means there is no price incentive to have a double, but it is hitting sales in the short term," Mr Clarke said.
Yesterday's announcement follows a string of bad news from Wetherspoon and the high street pubs sector. In early September, the group reported its first fall in profits since it floated in 1992. It also warned that price cuts and cost increases would hit profits in this current year.
The high street has been flooded with overcapacity in recent years. Regent Inns, which runs the Walkabout chain, has issued a string of profits warnings. Yates Group and Eldridge Pope have gone into private hands.