Strong demand for cocktails from younger customers has helped boost JD Wetherspoon, but the pub giant has seen some of its older clientele stay away.
The company has reported like-for-like sales for the 15 weeks to 7 November 2021 were 8.9% lower than the record sales achieved in the same period in 2019. Bar sales were down 9.6%, food was down 8.1%, fruit/slot machines were down 12.3% and hotels were up 11.5%. Wetherspoon stated: “This is an improvement compared with sales of minus 17.8% in the last ten weeks of the previous financial year (ten weeks to 25 July 2021), when pubs reopened inside – although restrictions applied for most of that trading period.
In the last 15 weeks, there has been a considerable increase in sales of the range of drinks often consumed by younger customers, for example cocktails (up 45%), vodka (up 17%) and rum (up 26%).
However, draught products, more often consumed by older customers, have been under pressure, with traditional ales down by 30% and stout down by 20%.
The company’s pubs which trade under the ‘Lloyds’ banner, with music, mostly at the weekends, were up 0.5%, probably reflecting a higher percentage of younger customers. Contrary to some forecasts (including our own), trade has been positive in the centre of many, but not all, larger cities and towns – and negative in the suburbs. For example, sales have been positive in in central Liverpool (up 9.1%), Newcastle Upon Tyne (up 11.1%), Oxford (up 11.3%), Chester (up 4.3%), Bournemouth (up 4.2%), Nottingham (up 3.6%), Cardiff (up 3.5%) and Manchester (up 0.4%). In contrast, trade has been lower in central London (down 17.4%).
As expected, trade has been lower in airports (down 38.8%), stations (down 22.4%), and also in Scotland (down 12.2%) and Northern Ireland (down 11.0%), where some restrictions still apply. Supply chain issues in pubs have been extensively debated in recent months.
Tim Martin, chairman and founder of the company, said he hopes the rollout of Covid-19 booster vaccinations could help improve its trade among older customers.
“With no music in Wetherspoon pubs, apart from 46 trading as Lloyds, a material proportion of our trade comes from older customers, some of whom have visited pubs less frequently in recent times,” he said.
“As outlined in our annual report, published in October 2021, there have been no outbreaks of Covid-19, as defined by the health authorities, among customers in Wetherspoon pubs.
“However, some customers have been understandably cautious. Improvement in trade will therefore depend, to some extent, on the outlook for the Covid-19 virus.
“Whereas we have an increased element of caution about near-term sales, booster vaccinations and better weather in the spring are likely to have a positive impact in the coming months.”
Wetherspoons added that its food volumes “appear to have been affected by some customers working from home”, with sales of breakfasts dropping by 22% and coffee sales falling 30%.
The company also told investors it has had “some problems from time to time” within its supply chain over the period, but it stressed these related to a “minority of items” for which it could find alternative.