Wednesday 24 January 2024 7:22 am
Sir Tim Martin, the outspoken boss of JD Wetherspoon, has said labour and energy costs are far higher than pre-pandemic, highlighting the disparity between pubs, restaurants and supermarkets.
In an update this morning, the boss of the no-frills boozer said: “The price of a pint in a supermarket is about £1, so a 10 per cent increase in labour costs (which are around 10 pence per pint) necessitates a one pence increase in the selling price to cover costs.
“However, for pubs, the average selling price of a pint is around £4.50. The labour per pint is therefore around £1.35 (30 per cent of £4.50), necessitating a 13.5 pence increase in the selling price to cover extra costs.”
He added: “The inevitable consequence is that increased labour costs raise the differential in prices between the hospitality industry and supermarkets”
It comes as Wetherspoons provided an update to investors regarding its Christmas trade, with the firm trading in line with market expectations.
Sales were 10 per cent higher than the same period a year ago – with bar sales jumping by 11.8 per cent, food by 7.9 per cent and slot/fruit machines by 10.4 per cent.
Despite the lift in sales, the chief said the sector is still struggling from high energy and labour costs.
He said: “Wetherspoon, like the hospitality industry, has seen a consistent but slow recovery, following the pandemic.
“Although inflation is, in general, reducing, labour and energy costs are far higher than pre-pandemic.”