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Morning Briefing for pub, restaurant and food wervice operators

Fri 14th Sep 2018 - Wetherspoon reports like-for-likes up 5%, to invest £27m in increased pay in November
Wetherspoon reports like-for-likes up 5%, to invest £27m in increased pay in November: JD Wetherspoon has reported sales up 2% to £1,693.8m in the 52 weeks ended 29 July, with like-for-like sales up 5%. Profit before tax was up, after exceptional items, 16.5% to £89m. Tim Martin, chairman of JD Wetherspoon, said: “There will be a huge gain for business and consumers if the UK copies the free trade approach of countries like Singapore, Switzerland, New Zealand, Australia, Canada and Israel, by slashing protectionist EU import taxes (‘tariffs’), on leaving the EU in March next year. These invisible tariffs are charged on over 12,000 non-EU products, including rice, oranges, coffee, wine and children’s clothes. The proceeds are collected by the UK taxman and sent to Brussels. Ending tariffs will reduce shop and pub prices, improve living standards, and will help non-EU suppliers, currently discouraged by tariffs, quotas and the extensive paraphernalia of EU protectionism. If parliament votes to end tariffs and rejects the ‘Chequers Deal’, consumers and business will benefit additionally by avoiding a cost of £39 billion, or £60 million per UK constituency, in respect of the EU ‘divorce payment’ – for which there is no legal obligation. Parliament can also regain control of UK fishing waters, where 60% of the catch is currently taken by EU boats. Unfortunately, some individuals, businesses and business organisations have mistakenly, or misleadingly, repeated the myth that food prices will rise without a ‘deal’ with the EU. In fact, the only way prices can rise post-Brexit is if parliament votes to impose tariffs. The EU will have no say in the matter, provided that the government does not sign away the UK’s rights in a ‘deal’ in the meantime. Like-for-like sales in the six weeks to 9 September increased by 5.5%. The company has had a reasonable start to the financial year, but taxes, labour and interest costs are expected to be higher than those of last year, so we estimate that like-for-like sales growth of about 4.0% will be required for the company to match last year’s record profits.” The company added: “As always, the company has tried to improve as many areas of the business as possible, on a week-to-week basis, rather than aiming for ‘big ideas’ or grand strategies. Frequent calls on pubs by senior executives, the encouragement of criticism from pub staff and customers and the involvement of pub and area managers, among others, in weekly decisions, are the keys to success. We now have 807 pubs rated on the Food Standards Agency’s website – the average score is 4.97, with 97.3% of the pubs achieving a top rating of five stars and 2.4% receiving four stars. We believe this to be the highest average rating for any substantial pub company. In the separate Scottish scheme, which records either a ‘pass’ or a ‘fail’, all of our 64 pubs have passed. We paid £43m in respect of bonuses and free shares to employees in the year (a slight increase compared with the previous year), of which 97% was paid to staff below board level and 82% was paid to staff working in our pubs. The company has been recognised as a Top Employer UK (2018) by The Top Employers Institute for the 15th consecutive year. The company substantially increased the rates of pay in the period for hourly paid staff, at a cost of about £20m. The company intends to invest a further £27m from November this year. Under government legislation, there are different minimum rates of pay for different age groups. The company pays in excess of the minimum rates for all age groups. The company currently pays a rate in excess of the minimum rate for over 25s to those aged 21 and over. As from 5 November 2018, this higher rate of pay will apply to all employees aged 18 and over. In the field of charity, thanks to the generosity and work of our customers, pub and head-office teams, we continue to raise record amounts of money for CLIC Sargent, supporting young cancer patients and their families. In the last year, we raised approximately £1.7m, bringing the total raised to over £16m – more than any other corporate partner has raised for this charity. The company opened six pubs during the year, with 18 sold or closed, resulting in a trading estate of 883 pubs at the financial year end. The average development cost for a new pub (excluding the cost of freeholds) was £2.8m, compared with £2.3m a year ago. The full-year depreciation charge was £79.3m (2017: £73.9m). We currently intend to open about 5-10 pubs in the year ending July 2019.”

Calorie count plan put out to consultation: The proposal to list calories on menus has been put out to consultation today. Ministers said that the lists would make diners better informed, but hinted at concessions for smaller businesses and outlets whose menus change rapidly. In announcing the consultation ministers said the move would put restaurants on the same footing as supermarkets. They said surveys suggested three quarters of voters wanted more information on the food they eat and radical steps were needed to tackle obesity, which costs the NHS £6.1 billion a year. Steve Brine, the public health minister, said: “This is not about forcing anyone to eat certain things or companies to behave in a certain way but I firmly believe we have a right to know the nutritional content of the food we give to our children. Type 2 diabetes is on the rise, and is often both preventable and reversible.” Ministers have secured the backing of diabetes charities and the Royal College of Paediatrics and Child Health for the move. Helen Dickens, of Diabetes UK, said: “People living with diabetes and more than three quarters of the British public have told us that they want more information about what’s in the food and drink they buy, to help make healthier choices – especially when they’re out and about.”

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