JD Wetherspoon Plc warns of low pretax profits

British pub chain JD Wetherspoon Plc has warned of low pretax profits in the first half of its fiscal year, according to Reuters.

The chain has been fighting against higher costs as a rise in the minimum wage rate, growth in property prices and a Brexit-related fall in the strength of the pound have combined to make trade challenging. There is also a trend towards young people in the UK drinking less alcohol.

In November the chain said it would be raising pay for employees, as well as adjusting prices to allow for a new sugar tax on soft drinks.

Chief Executive Tim Martin said: “Costs, as previously indicated, are considerably higher than the previous year, especially labour, which has increased by about 30 million pounds in the period.”

JD Wetherspoon has over 900 pubs in Britain and Ireland, with plans to open a further 5 to 10 sites in this financial year.

The chain said despite the lower profits, like-for-like sales rose 7.2% in the 12 weeks to 20 January 2019, showing there was strong demand in the Christmas period. Rival Marstons Plc reported a 5.7% rise in its Christmas sales for the 16 week period leading to 19 January.