Pub group J D Wetherspoon said today that measures in Britain's recent budget would increase its taxes and business costs by £60m for its current year, but it had no immediate plans to raise prices.
The British pub chain said that like-for-like sales in the first quarter of its 2024-2025 financial year were 5.9% higher than the same period a year ago.
"The company is confident of a reasonable outcome for the year, although forecasting is more difficult given the extent of the increased costs," Chairman Tim Martin said in a statement.
Pub groups, which were hit hard by a cost-of-living crisis as a result of inflation and higher interest rates in recent years, are contemplating price hikes to mitigate cost increases.
While Wetherspoons does not have any plans for price hikes yet, Martin told Reuters that he expects the hospitality industry to raise prices across the board.
Martin said that the additional costs included a £30m charge related to higher national insurance contributions, which will be deducted out of annual operating profit.
Nevertheless, Martin said that the market still anticipates an increase in profits for the year.
"Wetherspoon's low-price consumer proposition should benefit in the event of trading down, with market share gains as smaller scale operators struggle to absorb wage inflation," analysts at Jefferies said in a note.
Wetherspoon's total sales were up 4.6% year-to-date, outperforming the sector's 1-2% range over the same time.
The FTSE 100 company's shares were up 2.8% today, after falling about 25% this year.
