Shares in pub group JD Wetherspoon (JDW) fell 7.5% to 951p after the company said its cautious older customer base had impacted footfall in the last 15 weeks of trading.
Chairman Tim Martin said: ‘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.’
For the 15 weeks to 7 November, ostensibly the first quarter’s trading plus two weeks, like-for-like sales were 8.9% lower than the record sales reported in the same period in 2019 but an improvement compared with the final 10 weeks of the last financial year when sales were down 17.8%, impacted by some restrictions.
The comments from Wetherspoon mirror those from pub group Marston’s (MARS) which said it didn’t expect footfall to fully recover to pre-pandemic levels as customers preferred fewer, experiential-based visits.
COCKTAILS UP, STOUT DOWN
The company said it had seen contrasting fortunes for drinks consumed, reflecting the influence of a younger cliental which drove cocktails up 45% while traditional ales and stouts dropped 30% and 20% respectively.
Meanwhile, with some people still working from home sales of breakfasts and coffees were down 22% and 30% respectively.
The good news was the staycation boom boosted the hotels side of the business with like-for-like sales increasing by 11.5% while the pubs trading under the Lloyds banner generated 0.5% higher like-for-like sales, boosted by its younger client base.
CITIES AND TOWNS UP
In contrast to many forecasts the company said the sales performance in the centre of many towns and cities had been positive but negative in the suburbs.
Citing some examples, Liverpool (+9.1%), Oxford (+11.3%) and Nottingham (+3.6%) were ahead while central London proved the exception where sales were down 17.4%.
The company brushed aside any concerns about supply chain issues and recruitment but noted the busy Christmas period was yet to come.
CAUTIOUSLY OPTIMISTIC
Looking to the future, the company said despite some caution in the near term the prospect of booster staycations and better weather in the spring were 'likely to have a positive impact in coming months.’
Gregg Johnson, leisure analyst at Shore Capital, maintained his hold rating on the stock saying ‘Wetherspoons remains the alpha dog in the sector, however it is not immune from the repositioning of UK drinking habits and its historically low margin structure and price elasticity.’
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