Pub group JD Wetherspoon is to pay its employees more in response to the low rate of unemployment. About 250 workers at its pubs in the Republic will receive a pay rise from January 1st as part of the move, the company said.
The extent of the pay rise is still under review.
In a trading statement, Wetherspoon highlighted the record low level of unemployment in the UK and said the upward pressure on wages was prompting it to pay employees across the company more, starting from this week.
A similar picture exists in the Republic, where the unemployment rate of 5.3 per cent is hovering near post-crash lows.
In a trading update for the 13 weeks to the end of October, the chain said like-for-like sales increased by 5.5 per cent and total sales were up 6.2 per cent.
However, the group expects its annual results for the year to the end of July 2019 to be weaker than the previous year, despite sales growing “strongly”.
Wetherspoon chairman and founder Tim Martin said the company was dealing with tougher comparisons to previous periods, having delivered several years of record profits.
“It is difficult to be too precise at this early stage of the current financial year, but we now expect a trading outcome slightly below that achieved in the previous financial year,” he said.
“We will provide further updates on our trading as we progress through the year.”
Wetherspoon owns and operates more than 900 pubs, including five in the Republic, where it operates The Three Tun Tavern in Blackrock, The Forty Foot in Dun Laoghaire, The Great Wood in Blanchardstown, The Old Borough in Swords, and the Linen Weaver in Cork city. It is also planning a “superpub” on Dublin’s Camden Street.
Pro-Brexit views
Mr Martin, who is currently recovering from an operation after a burst appendix, is a vocal Brexiteer and devoted several pages in the statement to his views on how the UK should trade after it leaves the European Union.
In it, he takes issue with former British chancellor of the exchequer George Osborne implying in an interview that issues of sovereignty taken up by some in the pro-Brexit camp were “esoteric”.
“The desire for democracy and self-determination is not esoteric,” wrote Mr Martin. “North America, Japan, Singapore, India, Ireland and Australia, among many examples, have thrived following the end of what they saw as remote or arbitrary rule.”
Industry analyst Mark Brumby of Langton Capital said: "This is a short statement of 1,400 words with less than a couple of hundred relating to the group's trading, balance sheet, margins, trading position, outlook etc. The remainder deal with the chairman's views on Brexit.
“If this ratio reflects the split of effort that is being put into the running of the company, then shareholders may have something to think about.”
Shares in Wetherspoon dropped by 9.5 per cent on the London Stock Exchange following the trading update.
The company has opened two new pubs in the first quarter and has closed or sold three. It guided new openings of between five and 10 pubs in the current financial year.
“Having had several recent years of record profits, we are not immediately seeking to recoup these increased costs through higher pricing or ‘mitigation’, but will review that during the year,” said Mr Martin. – Additional reporting: PA
