British pub chain JD Wetherspoon said that sales had slowed significantly in its second quarter, blaming cheap supermarket prices for keeping bar receipts flat over Christmas and New Year. 

The company said it still expected a "satisfactory" full-year outcome, despite margins pressure, but its shares fell in early trade. 

Wetherspoon, which has grown to over 900 pubs on the back of cheap drinks and food deals, said sales at outlets open over a year rose 2.8% in the 12 weeks to January 18, its fiscal second quarter, well below the 6.3% posted in its first quarter. 

Underlying sales growth in December was 2% and had slowed further in the past two weeks, the company said. 

Margins also fell in the period, due to wage rises and increased utility costs, with its half-year operating margin expected to be 7.3%, 0.9% lower than a year ago. 

"Fewer and fewer customers, outside pockets of affluence, in an accelerating trend, are using pubs for "drinking occasions", which do not involve eating," Wetherspoon founder and chairman Tim Martin said in a statement today. 

Martin said this was due to the much cheaper price of drinks at UK supermarkets, which pay no VAT on food allowing them to subsidise alcohol prices, while pubs pay 20% VAT on food. Martin has long campaigned for tax equality. 

British rival Greene King posted flat underlyingsales for the six weeks to January 11 earlier this week. 

Wetherspoon is focused on sales growth and new sites and plans to spend £400m on 200 new pubs over the next five years, including new pubs in Cork city and Swords, Blanchardstown and Camden Street in Dublin in the next few months.