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Wed 6th Nov 2013 - JDW reports 3.7% LFLs; increases new openings
JDW reports 3.7% LFLs; increases new openings: JD Wetherspoon has reported a 3.7% rise in like-for-like sales in the quarter to 27 October, with total sales up 7.6%. The company has also increased its guidance on new openings with as many as 50 opening this year. The operating margin was 8.3%, approximately 0.3% lower than the same period in the last financial year, mainly due to increased labour, repairs, marketing and central overheads. The company stated: “The company believes that this increased expenditure will benefit the future performance of the business. The margin in the quarter is a possible indicator for this financial year, assuming we achieve reasonable sales growth. The company opened eight new pubs in the quarter and has 12 more under development. We now anticipate opening 40 to 50 pubs in total this year, slightly more than previously anticipated, helped by our increased bank facility and a number of recent acquisitions. As previously indicated, the biggest danger to the pub industry is the VAT disparity between supermarkets and pubs. Since supermarkets pay almost no VAT in respect of food sales, whereas pubs pay 20%, supermarkets are able to subsidise their drinks’ prices to the detriment of pubs, around 10,000 of which have closed in the last decade. It does not make economic or social sense for the government to favour powerful supermarkets with what amounts to a “tax break”, especially since pubs generate so many more jobs, and so much more tax, per pint or meal, than supermarkets. In spite of the continued pressure from costs and taxes, the company remains confident of a reasonable outcome for the current financial year.” Last month, as exclusively reported by Propel, JD Wetherspoon raised the food ante with the launch of a new menu that sees food served an extra hour until 11pm and free coffee refills until 2pm. The extended food service hours mean the company is serving food for 15 hours each day, starting with breakfast at 8am, and the purchase of a single cup of coffee will allow limitless filter refills. Wetherspoon also launched a new meal club, the Chicken Club, offering char-grilled peri-peri chicken on a Wednesday between 12 noon and 11pm, with new dishes including ten spicy chicken wings and new combos that offer meat or fish options to be added. The company has also expanded the number of dishes for calorie counters, with 18 under 500 calories, including a pasta pomodoro dish and a skinny chicken breast burger. New main course dishes include a chicken and ribs combo, a new salmon salad and a pulled pork sandwich. Wetherspoon added a gourmet hot dog to its menu at the start of the year.
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